Schroders PLC · LSE:SDR
Schroders — Investor Presentation (October 2009)
23 slides from Schroders's investor presentation, October 2009
Slide 1: Schroder Multi-Manager Portfolios
Schroder Multi-Manager Portfolios Iain Barnes, Fund Manager, Multi-Manager Investment Team Julian Sutton, Fund Manager, Multi-Manager Investment Team October 2009 For professional advisers only. This material is not suitable for private customers
Slide 2: Agenda
Agenda Schroder Multi-Manager Portfolios Performance Changes to Portfolios Current positioning Appendix – Economic and Market Outlook 1 931320
Slide 3: Five EUR risk profiles: current portfolio allocations
Schroder Multi-Manager Portfolios Five EUR risk profiles: current portfolio allocations as at 30th September 2009 Potential Return 13% 0% 6% 0% 15% 17% 0% 81% 19% 27% 0% 20% Aggressive Growth 68% 0% 41% 19% Growth Fixed income 54% Equities 57% Balanced Alternatives 24% 39% Cash Income and Growth Con
Slide 4: Performance: EUR profiles A1 shares to 30th September 2009
Performance Schroder Multi-Manager EUR profiles A1 shares to 30th September 2009 Profile Performance (in €) 120 110 100 90 80 70 60 50 40 Sep 06 Dec 06 Mar 07 Jun 07 Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 Conservative Income and Growth Balanced Growth Aggressive Growth MSCI E
Slide 5: Performance: USD profiles A1 shares to 30th September 2009
Performance Schroder Multi-Manager USD profiles A1 shares to 30th September 2009 Profile Performance (in US$) 190 180 170 160 150 140 130 120 110 100 90 80 70 Dec 03 Jun 04 Dec 04 Jun 05 Dec 05 Jun 06 Dec 06 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Conservative Income and Growth Balanced Growth Aggressive
Slide 6: Very few places to make money in 2008
Performance Very few places to make money in 2008: diversification did not work % Returns 20% 7.4% 10% 4.0% 1.8% 0% -3.9% -10% -20% -23.6% -30% -26.8% -30.0% -33.5% -32.7% -40% -39.6% -44.0% -50% -48.9% -60% -63.6% -70% 2008 return STS Balanced Portfolio (A1, net) European Equities (EUR) Global Equi
Slide 7: Year to date returns to 30th September 2009
Performance Year to date returns to 30th September 2009 % Returns 80% 69.2% 70% 60% 50% 43.8% 40% 31.2% 27.8% 30% 26.1% 25.9% 23.0% 19.7% 20% 14.2% 10.3% 10% 6.0% 3.7% 2.0% 0% 2009 YTD return STS Balanced Portfolio (A1, net) European Equities (EUR) Global Equities (EUR) Euro Bonds (EUR) Euro Credit
Slide 8: EUR profiles year to date performance, risk/return
Performance Schroder Multi-Manager EUR profiles – year to date performance to 30th September 2009 Risk/Return characteristics against competitive universe, in EUR Return year to date of Schroder Multi-Manager Euro portfolios 30 25 20 15 10 5 Annualized volatility 0 0 5 10 15 20 25 Schroder Multi-Man
Slide 9: EUR profiles since inception, risk/return
Performance Schroder Multi-Manager EUR profiles – since inception to 30th September 2009 Risk/Return characteristics against competitive universe, in EUR Annualized return of Schroder Multi-Manager Euro portfolios 5 0 -5 -10 Annualized volatility -15 0 5 10 15 20 25 Schroder Multi-Manager Universe S
Slide 10: Asset allocation since 30/09/2007
Schroder Multi-Manager Portfolios Asset allocation since 30/09/2007 Schroder MM Balanced Portfolio EUR - Recent Activity: asset class exposures Portfolio Composition – Portfolios continue to have above 100% normal exposure to risk assets 90% – Exposure to government bonds has been reduced 80% – With
Slide 11: Current Portfolio Positioning
Current Portfolio Positioning Equities – We have above normal exposure to equities – Pragmatic managers have been shifting their portfolios towards more cyclical areas – Within regions, we continue to favour Asia and Emerging Markets at the expense of the US Bonds – We have little exposure to govern
Slide 12: Schroder Multi-Manager - Asset Allocation
Schroder Multi-Manager - Asset Allocation Conservative Income Balanced Growth Aggressive Growth Equities 23.9% (0-35%) 39.0% (20-50%) 53.7% (35-65%) 68.5% (50-80%) 83.1% (65-100%) Fixed Income 56.8% (40-80%) 41.0% (25-65%) 27.4% (10-50%) 17.1% (0-35%) 6.1% (0-20%) Investment Grade 38.4% 23.0% 9.6% 0
Slide 13: Appendix
Appendix #% Schroders 931320
Slide 14: Global activity indicators have strengthened
Global activity indicators have strengthened Industrial production to lead recovery y/y% normalised 12 3 8 2 4 1 0 0 -4 -1 -8 -2 -12 -16 -3 -20 -4 85 87 89 91 93 95 97 99 01 03 05 07 09 NBER recession phase G7 industrial production Global activity indicator, rhs Source: Schroders, Thomson Datastream
Slide 15: Global growth forecast
Global growth forecast Deep recession 2009, weak recovery 2010 y/y% 5 Asia crisis Baseline forecasts Last US recession 4 3 2 1 0 -1 -2 -3 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Growth contribution from the OECD countries Growth contribution from emerging markets Global Growtth Source: IMF, Con
Slide 16: Performance and sentiment towards risk assets
Performance and sentiment towards risk assets Fund managers move overweight equities Performance of global equities vs. Govt. bonds Global fund managers’ net % overweight in equities* y/y% y/y% Normalised 50 12 3 10 Investors are bullish/ overweight equities 40 8 2 30 6 20 1 4 10 2 0 0 0 -10 -2 -1 -
Slide 17: Are equity markets cheap or expensive?
Are equity markets cheap or expensive? Collapse in earnings drives PE above levels seen in the tech boom Trailing PE S&P 500 (vs. 20 year historical average) Trend PE S&P 500 (vs. 20 year historical average) 140 50 120 40 100 80 30 60 20 40 10 20 0 0 89 91 93 95 97 99 01 03 05 07 09 89 91 93 95 97 9
Slide 18: Long run measures suggest the market is good value
Long run measures suggest the market is good value Graham and Dodd PE indicates healthy returns over the next 10 years % Level 25 0 5 20 10 15 15 20 10 25 5 30 0 35 40 -5 45 -10 50 1900 1908 1915 1923 1930 1938 1945 1953 1960 1968 1975 1983 1990 1998 2005 2013 2020 S&P 500 10 year rolling annualised
Slide 19: Europe looking cheap
Europe looking cheap MSCI Europe relative to MSCI USA – Shiller P/E: close to lows November 1979 to June 2009 1.5 1.4 1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 Relative Shiller PE Average Source: MSCI, Morgan Stanley Research, June 200
Slide 20: Back from the brink
Back from the brink After hitting 1930s levels, credit spreads have narrowed sharply Credit spreads and default rate (1925 - 2009) Credit meltdown bps % 800 9 700 8 The Great Depression 7 600 Tech recession 6 500 5 400 4 300 3 200 2 100 1 0 0 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79
Slide 21: Fixed Income Fund Performance
Fixed Income Fund Performance Underlying fund performance has been strong in 2009 European core/investment grade bond funds European high yield bond fund 20 50 15 40 10 30 5 20 0 10 -5 0 Dec-08 Mar-09 Jun-09 Sep-09 Dec-08 Mar-09 Jun-09 Sep-09 PIMCO GIS Euro Bond Inst (MF) Morgan Stanley Euro Corpora
Slide 22: New holding: Electra Private Equity PLC
Schroder Multi-Manager Portfolios New holding: Electra Private Equity PLC – Quality portfolio of diversified Electra Private Equity private equity investments, with a defensive bias In GBP – Shares were sold off heavily in 2100 Q4 08, as the market 1900 indiscriminately sold private 1700 equity inve
Slide 23: Important information
Important information Investments: No Guarantee, may lose value Strategic Solutions (the “Company”) may not be sold in the United States nor to citizens or residents of the United States These portfolios are fund-of-funds investment vehicles; therefore, trade settlement differs from that of traditio