Rocklinc Principled Equity ETF · TSX:RKLC
Rocklinc Principled Equity ETF — ROCKLINC Investment Partners — Investor Presentation (September 2021)
30 slides from Rocklinc Principled Equity ETF's investor presentation, Sep 16, 2021
Slide 1: ROCKLINC Investment Partners Webcast
ROCKLINC Investment Partners Webcast September 16, 2021
Slide 2: Outline of Presentation
Outline of Presentation A. ROCKLINC Overview & History B. Investment Philosophy/Process C. Investment Challenges D. Sectors of Focus E. Performance Summary F. Case for Gold G. Nestle
Slide 3: A. ROCKLINC Overview
A. ROCKLINC Overview Ø Portfolio Manager: Jonathan Wellum Ø 31 years in investment industry Ø Founded ROCKLINC in 2010 – current AUM $240 million Ø Approximately 200 families Ø 6 Full Time Employees Ø Interdisciplinary Approach to Investments – Strong Worldview
Slide 4: ROCKLINC Team
ROCKLINC Team ROCKLINC Investment Partners Inc. Portfolio Investment Administration Management Research Marketing & Admin. Doretta Amaral Jonathan Wellum Jesse Van De Merwe Jonathan Wellum Jr Vice-President President & CEO Financial Analyst Marketing Coordinator Andrew Cheng Braden VanDyk Financial
Slide 5: ROCKLINC - Corporate Partners
ROCKLINC - Corporate Partners Legal Counsel, Custodian Securities Legal Counsel, Fund Auditor Corporate Corporate Auditor
Slide 6: B. Investment Philosophy
B. Investment Philosophy 1. Safe Assets 2. Focused Portfolios (25-35 stocks) 3. Medium to Long-Term Holding Period 4. Purchase with a Margin of Safety 5. Understand the Current Economic Environment 6. Ethical Overlay
Slide 7: Investment Process
Investment Process 1. Invest within our circle of competence. 2. Think independently. 3. Evaluate risk factors. 4. Look for industries with above-average growth. 5. Invest in businesses with high returns on capital. 6. Invest in businesses with high operating leverage, low financial leverage. 7. Pre
Slide 8: C. Investment Challenges
C. Investment Challenges 1. Levels of Deficits/Debt/Money Printing - $36 trillion new debt due to COVID-19 response! 2. Global Geo-Political Instability 3. Cult of ESG (Environmental, Social, Governance) 4. COVID-19 – Vaccinations & Vaccine Passports 5. Market Valuations - Expensive
Slide 9: 1. Levels of Debt/Deficits/Money Printing – Largest in History
1. Levels of Debt/Deficits/Money Printing – Largest in History
Slide 10: Global debt is fast approaching $300 trillion
Global debt is fast approaching $300 trillion $ trillion 9% of GDP, weighted avg. 370 290 Global debt (in USD) 96 of GDP (rhs) 2014 2015 2016 2017 2018 2019 2020 2021 Source: IIF, BIS, IMF, National sources
Slide 11: Chart 2: Sharp surge in debt-to-GDP ratios
Chart 2: Sharp surge in debt-to-GDP ratios percentage points, estimated change in debt ratios in 2020 France Spain Greece UK Belgium Cyprus Canada Portugal Hong Kone <Rone Austria ra Kores Thailand Norw: ays ee ungary Germany am South uiries Saudi Arabi: Vietnam na : Household weigands —— Indonesia
Slide 12: 2. Global Geo-Political Instability
2. Global Geo-Political Instability Ø US weakness leads to greater global instability. Ø China/Russia/Iran and now Afghanistan alliance. Ø Increased threat of global terrorism. Ø Increasing global regulation – lowers economic growth. Ø Insatiable demand for new tax revenues, including corporate taxe
Slide 13: 3. The Cult of ESG
3. The Cult of ESG (Environmental, Social, Governance) Ø Massive virtue signalling – herd mentality Ø Significant misallocation of capital into underperforming investments, often subsidized by government edict (ie. forcing green energy too quickly) Ø Promotes dangerous and divisive theories such as
Slide 14: The Cult of ESG
The Cult of ESG Hypocrisy: Why don’t the world’s leader call out China? 1. The US has reduced their global emissions by more than any other country in the world for more than 25 years! 2. China’s emissions will continue to grow until 2030! 3. China’s greenhouse gas emissions in 2019 exceeded those o
Slide 15: 4. COVID-19 – Vaccinations & Vaccine Passports
4. COVID-19 – Vaccinations & Vaccine Passports Ø COVID-19 has been overplayed and created too much fear in our society. Lockdowns the most costly and dangerous economic decision in history. Ø Vaccines will not solve the COVID-19 virus. Vaccinations may in the short-run lessen severity in extreme cas
Slide 16: 5. Market Valuations - Expensive
5. Market Valuations - Expensive
Slide 17: S&P Composite Real Price with Crestmont P/E Ratio
ADVISOR : BENS ves S&P Composite: 1871-Present Real Price with the Crestmont P/E Ratio Log Scale analysis in collaboration with Crestmont Research (www.CrestmontResearch.com) 10000 4 P/E Quintiles The horizontal bands show the quintile breakdown of the Crestmont Top 17.2 -33.8 2nd 14.4 - 17.2 3rd 12
Slide 18: D. Sectors of Focus
D. Sectors of Focus 1. Infrastructure 4. Manufacturing 7. Agriculture 2. Financial 5. Precious Metals 8. Water 3. Technology & 9. Consumer 6. Healthcare Telecom Services Staples
Slide 19: E. Looking ahead
E. Looking ahead 1. Maintain large weightings in Precious Metals, Infrastructure & Technology (approximately 50% of portfolios). 2. Add in other sectors as opportunities emerge. 3. Reallocating from overpriced securities to better priced securities. 4. Keeping a close watch on geo-political risk and
Slide 20: F. Performance Summary
F. Performance Summary As at August 31, 2021 (after all fees) (70% equity 30% bonds and short-term cash)* 1 mos. 3 mos. 1 yr 3 yrs. 5 yrs. I0 yrs. 0.48% 4.51% 7.05% 12.63% 9.86% 7.90%
Slide 21: Performance Summary
Performance Summary As at August 31, 2021 (after all fees) 100% Equity Performance 1 mos. 3 mos. 1 yr. 3 yrs. 5 yrs. 10 yrs. Rocklinc .63% 5.90% 10.20% 18.50% 14.14% 13.85% S&P/TSX 1.45% 4.32% 24.64% 8.17% 7.11% 4.89% S&P500 2.90% 7.58% 29.21% 15.95% 15.81% 14.01%
Slide 22: Gold: Case for Portfolio Constituency
Gold Case for Portfolio Constituency 1) Store of Value I) Inflation & Expansion of Money Supply Ø Gold has successfully protected long-term purchasing power as major currencies’ values plummet due to inflation and expansion of money supply
Slide 23: II) Financial Repression
II) Financial Repression Ø Gold has historically done well during period of declining real rates
Slide 24: Portfolio diversification; Tangible and portable
2) Portfolio diversification Ø ‘Safe haven’ bid during times of turmoil 3) Tangible and portable Ø Cannot be hacked or traced; easily convertible to cash and can go with you anywhere Ø No counterparty risk; gold cannot go bankrupt and will never default on its obligations
Slide 25: Superior returns; Increasing demand
4) Superior absolute and risk-adjusted returns Ø Gold has outperformed most other commodities over multiple time horizons 5) Increasing demand Ø Central banks and governments hold massive reserves – Gold is third largest reserve asset globally
Slide 26: Royalty & Streamers, Miners
Royalty & Streamers ow) Franco-Nevada SANDSTORM ABITIBI GOLD ROYALTIES ROYALTIES INC. W WHEATON’ Ip ROYALGOLD,INC PRECIOUS METALS Miners jm ~~ FIRST MAJESTIC SR PAN AMERICAN AGNICO EAGLE ) — SILVER —
Slide 27: Nestle SA
Nestle SA (OTC:NSRGY) Ø World’s largest food and beverage company with products in >180 countries Ø Over 30 of its brands generates >$1B in annual revenue
Slide 28: Portfolio Transformation
Portfolio Transformation Ø Management has taken several steps to position its portfolio of brands in higher long- term growth trends Ø Since 2017, Nestle has closed or announced >75 transactions (acquisitions and dispositions)
Slide 29: Investment Thesis
Investment Thesis Ø Global Leader with Significant Economies of Scale Ø Strong brand reputation and long-standing relationships with suppliers and retailers Ø Rapid R&D Innovation Ø Invested >$1.5B annually over the past 9 years Ø Dividend Aristocrat Ø Increased its dividend for 25 consecutive years
Slide 30: WWW.ROCKLINC.COM
ROCKLINC Worth. Investing. WWW.ROCKLINC.COM
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