Ausbil Active Dividend Income Fund - Active ETF · ASX:DIVI
Ausbil Active Dividend Income Fund - Active ETF — Ausbil Investment Management — Ausbil Global Equity Market Outlook Webinar February 2019
26 slides from Ausbil Active Dividend Income Fund - Active ETF's conference presentation, February 2019
Slide 1: Global Equity Market Update
Global Equity Market Update With the Ausbil Global SmallCap team February 2019 Simon Wood – Portfolio Manager, Global SmallCaps Tobias Bucks – Portfolio Manager, Global SmallCaps
Slide 2: Disclaimer
DISCLAIMER Important information for presentation recipients The information provided by Ausbil Investment Management Limited (ABN 26 076 316 473 AFSL 229722) has been done so in good faith and has been derived from sources believed to be accurate at the time of compilation. Changes in circumstances
Slide 3: Ausbil investment team
Ausbil investment team Integrated functions within portfolio management PORTFOLIO CONSTRUCTION COMMITTEE JOHN GRACE (17/33) PAUL XIRADIS (22/39) GIAN PANDIT (3/28) Co-Head of Equities CIO / Head of Equities Deputy Head of Equities RESEARCH ECONOMICS MICROCAP GLOBAL SMALLCAPS MASON WILLOUGHBY-THOMAS
Slide 4: Ausbil Global Small Caps team
Ausbil Global Small Caps team Experienced, passionate, aligned Simon Wood, CFA Tobias Bucks Portfolio Manager, Global Small Caps Portfolio Manager, Global Small Caps B Arts (Hons) Finance and Accounting, CFA, CGMA M.Arts (Hons) Social Anthropology Simon has over 18 years of investment experience wor
Slide 5: Q. Focused on an earnings revisions investment philosophy?
Q. Focused on an earnings revisions investment philosophy? 5
Slide 6: Australian equities investment philosophy
Australian equities investment philosophy Quality and risk control = intentional outperformance • Equity markets efficient but not perfect • Ausbil employ a “core/style indifferent” investment approach – Portfolios comprise both “value” and “growth” securities – Based on a core belief that earnings
Slide 7: Global SmallCap investment philosophy
Global SmallCap investment philosophy Delivering superior risk adjusted returns Seek to identify Unrecognised Growth, which in turn will deliver superior risk adjusted returns (aiming to provide best in class Sharpe ratios) over the medium to long-term. Provide our clients with a portfolio of attrac
Slide 8: MSCI World Returns & Earnings Growth
MSCI World Returns & Earnings Growth Earnings growth drives share prices Source: Ausbil, MSCI. Returns are Net Total Returns in USD 8
Slide 9: Q. The last quarter of 2018 was a tough one for global equities
Q. The last quarter of 2018 was a tough one for global equities, how has US earnings season gone and has it had an impact on your outlook for 2019? 9
Slide 10: Global & US Earnings Update
Global & US Earnings Update Slower earnings growth has effected equity markets S&P 500 Waterfall Chart EPS Growth Forecasts & Global EPS Growth Forecasts EPS Surprise (Actual vs Estimated EPS) US Tax legislation benefit Current growth & surprise Lower growth in 2019 Source: Ausbil, Citigroup, Bloomb
Slide 11: Q. What sort of economic data do you find most important?
Q. What sort of economic data do you find is most important when it comes to positioning your portfolio? 11
Slide 12: Insightful Macroeconomic Data
Insightful Macroeconomic Data GDP data lags; PMI data is much more insightful May-17 Aug-17 May-18 Aug-18 Nov-17 Nov-18 Sep-17 Mar-17 Dec-17 Sep-18 Mar-18 Dec-18 Feb-17 Apr-17 Jun-17 Feb-18 Apr-18 Jun-18 Jan-17 Oct-17 Jan-18 Oct-18 Jan-19 Jul-17 Jul-18 Key Global Indicators Global PMIs 52.6 52.9 52.
Slide 13: Q. Why should Global Small Cap be part of a Global equity portfolio?
Q. Why should Global Small Cap be part of a Global equity portfolio? 13
Slide 14: Global Small Cap vs Global Large Cap
Global Small Cap vs Global Large Cap Superior long term risk adjusted performance Source: Ausbil, MSCI. Sharpe ratio calculated from monthly returns; risk free rate used is the ICE LIBOR 1M 14
Slide 15: Global small caps managed in Sydney
Global small caps managed in Sydney No disadvantages compared to global peers • Independent and organic idea generation • Zero information disadvantage • Improvements in market data and technology • Global small cap conferences & research trips • Global standardisation of accounting data due to adop
Slide 16: Q. Can you tell us more about your investment philosophy and process?
Q. Can you tell us more about your investment philosophy and process? 16
Slide 17: Style performance through time
Style performance through time It’s all about Unrecognised growth… Value Unrecognised Growth Recognised Growth Quality (High Free Cash Flow (Change in Forecast EPS (High Forecast EPS (High ROIC) Yield) Growth) Growth) …Recognised growth is not rewarded Source: Ausbil, UBS Global Style Indices (TR):
Slide 18: Global SmallCap investment process
Global SmallCap investment process Four stage process focused on alpha creation STAGE 1: STAGE 2: STAGE 3: STAGE 4: Macroeconomic Region & Sector Stock Portfolio Analysis Analysis Selection Construction Assess current economic Identification of Fundamental stock Robust, appropriate and market condit
Slide 19: Ausbil Global SmallCap Fund: Portfolio characteristics vs the benchmark
Ausbil Global SmallCap Fund Portfolio characteristics vs the benchmark Liquidity Weighted Positions Unrecognised Growth Quality Valuations Recognised Growth 19.2 8.6 23.7 12.7 82.7 74.7 10.9 8.1 2.5 2.1 3.9 -0.5 ROE Debt to Equity Unrecognised Recognised Dividend Yield Free Cash Flow Growth (EPS Gro
Slide 20: Q. Can you go through an example of a stock you hold?
Q. Can you go through an example of a stock you hold and how it has performed in reporting season? 20
Slide 21: Stock selection
Stock selection EPS upgrades drive outperformance Unrecognised growth (forward earnings upgrades) have driven strong relative outperformance Source: Bloomberg 21
Slide 22: Ausbil Global SmallCap Fund: Key themes and holdings
Ausbil Global SmallCap Fund Key themes and holdings US Consumer Food Staples MedTech IT Disruption Source: Ausbil 22
Slide 23: Conclusion
Conclusion Earnings are the key driver of equity markets • The Ausbil Investment Philosophy is focused on earnings and unrecognised earnings growth • Global Small Caps has delivered excellent risk adjusted returns • The Ausbil Global Small Cap Fund • experience investment team, • proven process, • f
Slide 24: Appendix – Portfolio guidelines, constraints and fund structure
Appendix – Portfolio guidelines, constraints and fund structure
Slide 25: Portfolio guidelines and constraints
Portfolio guidelines and constraints Summary Guideline or constraint Ex-ante tracking error Typically 2-6%, max 10% Turnover Typical 50 to 80%, up to 150% Derivatives None Currency hedging Unhedged Aggregate max company exposure 10% of the issued capital of a company Max security weight 5% of the Fu
Slide 26: Ausbil Global SmallCap Fund: Key features
Ausbil Global SmallCap Fund Key features Ausbil Global SmallCap Fund APIR AAP8285AU Investment To achieve returns (before fees and taxes) in excess of the MSCI World Small Cap Net Total Return (TR) Index in objective AUD over the long term. There is no guarantee that this objective will be achieved.
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