Ninety One Plc · LSE:N91
Ninety One — Ninety One SA Equity Webinar (January 2022)
15 slides from Ninety One's conference presentation, Jan 20, 2022
Slide 1: Capturing the improving opportunity set
Capturing the improving opportunity set Hannes van den Berg Rehana Khan 20 January 2022
Slide 2: Important information
Important information All information and opinions provided are of a general nature and are not intended to address the circumstances of any particular individual or entity. We are not acting and do not purport to act in any way as an advisor or in a fiduciary capacity. No one should act upon such i
Slide 3: Ninety One Equity Fund Performance
Ninety One Equity Fund Performance Annualised performance in ZAR 30% Ninety One Equity A Comparison index** (ASISA) South African EQ General 25% 20% 15% 10% 5% 0% 1 year 3 years p.a. 5 years p.a. 10 years p.a. 20 years p.a. Since inception p.a.* Equity A Inc 28.2% 16.6% 10.7% 12.6% 15.0% 15.4% Compa
Slide 4: Ninety One Equity Fund delivers consistent and repeatable alpha
Ninety One Equity Fund delivers consistent and repeatable alpha Core portfolio that has delivered consistent and repeatable returns Ninety One Equity Fund A share class relative to the General Equity sector 10 years as at 31 December 2021 16% Meeting this objective is a function of: Percentage of pe
Slide 5: Ninety One SA equity investment philosophy
Ninety One SA equity investment philosophy Earnings revisions at reasonable valuation — unique philosophy in SA ‒ Markets inefficient due to behavioural errors ‒ Exploited within a disciplined, evidence-based process High Bottom-up Fundamental ‒ Best alpha opportunities where expected future Stock S
Slide 6: Summary of views
Summary of views Stay invested in risk assets, notwithstanding periodic market corrections — Transition to mid economic cycle firmly under way as central banks accelerate their moves — Global growth moderating again due to omicron, but expected to rebound quite strongly from Q2 onwards — Supply chai
Slide 7: Equities have historically held up well during initial interest rate hikes
Equities have historically held up well during initial interest rake hikes Real interest rates expected to stay low in 2022, even in the face of 4 Fed hikes Average S&P500 returns before and after initial interest MSCI AC World Index – 12m before and 24m after first rate hike FED hike 40% 35,5% 35%
Slide 8: Equity exposure
Equity exposure Buy the recovery: Resources, local cyclical companies and tech at a discount Global defensives – c. 19% of equities Global cyclicals – c. 34% of equities ‒ Earnings expectations remain robust, while valuations are ‒ Exposure to diversified miners. Benefitting from tight reasonable co
Slide 9: Resources: a key contributor to performance
Resources: a key contributor to performance Robust earnings revisions profile, but all Resources were not equal Average earnings revisions of Resources sectors Exposure to Resources (% of SA equities) (Jan 2020 = 100) 350 40% 300 35% 30% 250 25% 200 20% 150 15% 100 10% 50 5% 0 0% Dec-20 Dec-21 Apr-2
Slide 10: Banks: increased allocation to SA banks supporting returns
4.0 70 60 90 2.0 2.5 50 1.0 1.5 100 0.0 0.5 3.0 3.5 80 110 Oct-02 Jan 20 Aug-03 Feb 20 Jun-04 Mar 20 Apr-05 Apr 20 May 20 (Jan 2020 = 100) Feb-06 Dec-06 Jun 20 Oct-07 Jul 20 Aug-08 Aug 20 Jun-09 Sep 20 Apr-10 Oct 20 Feb-11 Nov 20 Dec-11 Dec 20 Jan 21 Oct-12 Feb 21 Aug-13 Source: Bloomberg, Ninety On
Slide 11: Retailers: Capturing the opportunity as earnings expectations change
Retailers: Capturing the opportunity as earnings expectations change Actively increasing our exposure to SA Retailers during latter part of 2020 Average earnings revisions by sector Exposure to Clothing Retailers (% of SA equities) (Jan 2020 = 100) 10% 8% 110 6% 4% 2% 100 0% Dec-20 Dec-21 Apr-20 Apr
Slide 12: Well-diversified global equity portfolio to complement the domestic holdings
Well-diversified global equity portfolio to complement the domestic holdings Allocation to Growth and Defensives balanced with Cyclicals Defensives / compounders Global Growth c. 16% of offshore Equity c. 35% of offshore Equity ‒ Companies with steady earnings growth profile ‒ Companies with high gr
Slide 13: Conclusion
Conclusion — We remain strategically positive on growth assets as we transition into a mid-cycle environment (growth and expansion) — Slowdown in China’s economy and supply-side bottlenecks need close monitoring. Inflation expectations and wage pricing power are key risks — Expect more volatility. E
Slide 14: What differentiates Ninety One Equity Fund
What differentiates Ninety One Equity Fund Unique Active Dependable Philosophy approach outperformance Positive earnings Dynamic portfolio that Market beating revisions at a reasonable changes when performance through valuation conditions change investment cycles Core component of clients' portfolio
Slide 15: Thank you
Ninet Mone y Investing fora world of change Thank you
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