Thornburg Investment Grade Bond Managed Account Fund - Class I · NASDAQ:TIGMX
Thornburg Investment Grade Bond Managed Account Fund - Class I — Thornburg Investment Management — Q3 2021 Earnings Presentation
35 slides from Thornburg Investment Grade Bond Managed Account Fund - Class I's earnings presentation, October 2021
Slide 1: Thornburg Investment Management Quarterly Update: Investment Income Builder Fund
Q3 2021 Thornburg Investment Management Quarterly Update: Investment Income Builder Fund TP321 Brian McMahon Jason Brady, CFA All data in this presentation is as of 9/30/2021 unless otherwise noted. Vice Chairman President and CEO and Chief Investment Strategist Ben Kirby, CFA Matthew Burdett Co-Hea
Slide 2: Key Macroeconomic Issues
Thornburg Investment Income Builder Fund Key Macroeconomic Issues October 2021 Covid-19 pandemic stay-at-home orders for students, workers, and Central banks are flooding economies with liquidity, commercial bank consumers are loosening in many countries, including the U.S. deposits are growing
Slide 3: A Solution That Consistently Seeks to Provide Attractive Income
Thornburg Investment Income Builder Fund A Solution That Consistently Seeks to Provide Attractive Income • Pay attractive yield today • Grow the dividend over time (subject to OBJECTIVE periodic fluctuations) • Long-term capital appreciation • Global dividend-paying stocks INVESTIBLE UNIVERSE • Glob
Slide 4: Overview of Equity Portfolio Allocation Shifts
Thornburg Investment Income Builder Fund Overview of Equity Portfolio Allocation Shifts Thornburg Investment Income Builder equity portfolio’s comparative sector weights on various dates Increases in allocations towards tools for digital communication (Information Technology) and selected beaten d
Slide 5: Portfolio Characteristics
Thornburg Investment Income Builder Fund Portfolio Characteristics PORTFOLIO COMPOSITION EQUITY COMPONENTS % of Portfolio P/E Trailing 1-Yr 16.6x P/E Forward 1-Yr Estimate 10.8x Foreign Equity 51% Price to Book 1.4x Price to Cash Flow 5.7x Domestic Equity 33% Return on Equity (ROE) 11.9% Dividend Yi
Slide 6: Potential to Grow the Distribution over Time
Thornburg Investment Income Builder Fund Potential to Grow the Distribution over Time Consensus estimates for dividend growth over the next 12 months 2021 % of Equity Portfolio Est. Yield Holdings growing the dividend 75% 4.9% Holdings with a flat dividend 13% 3.9% Holdings paying lower dividends 12
Slide 7: Ten Largest Holdings
Thornburg Investment Income Builder Fund Ten Largest Holdings The investments shown following were the 10 largest equity investments in the Thornburg Investment Income Builder portfolio as of September 30, 2021. The 10 largest equity investments in the fund accounted for approximately 35% of fund as
Slide 8: Next 15 Equity Holdings (page 1 of 2)
Thornburg Investment Income Builder Fund Next 15 Equity Holdings (page 1 of 2) The 10 investments shown were the 11th through the 20th largest equity investments in the Thornburg Investment Income Builder portfolio as of September 30, 2021. Together, the 15 investments shown on the next two pages ac
Slide 9: Next 15 Equity Holdings (page 2 of 2)
Thornburg Investment Income Builder Fund Next 15 Equity Holdings (page 2 of 2) The 5 investments shown were the 21st through the 25th largest equity investments in the Thornburg Investment Income Builder portfolio as of September 30, 2021. 2020 YEAR YTD 2021 PRICE CHANGE DIVIDEND YIELD NAME OF COMPA
Slide 10: Next 28 Equity Holdings
Thornburg Investment Income Builder Fund Next 28 Equity Holdings 28 equity investments with the smallest weightings in the portfolio at 9/30/2021, shown by weighting, top to bottom and left to right. Weightings range from approximately 1.4% to < 0.10% of portfolio assets; does not include 4 small pr
Slide 11: Stock & Bond Yields from Identical Issuers
Thornburg Investment Income Builder Fund Stock & Bond Yields from Identical Issuers Top 10 Investment Positions: Equity Dividend Yield vs. Traded Debt Yield, Same Issuer TRAILING 12-MONTH DIVIDEND CURRENT MARKET DEBT SPECIFIC DEBT ISSUE YIELD (%) YIELD (%) Taiwan Semiconductor Manufacturing Co. Ltd.
Slide 12: Selected World Market Index Returns
Thornburg Investment Income Builder Fund Selected World Market Index Returns Total Returns (USD) 2015 2016 2017 2018 2019 2020 1Q21 2Q21 3Q21 USA: S&P 500 1.38% 11.96% 21.83% -4.38% 31.49% 18.40% 6.17% 8.55% 0.58% USA: Russell 3000 Growth 5.09% 7.39% 29.59% -2.12% 35.85% 38.26% 1.19% 11.38% 0.69% MS
Slide 13: Historically, Dividends Have Been Important to Total Return (S&P 500 Index)
Thornburg Investment Income Builder Fund Historically, Dividends Have Been Important to Total Return (S&P 500 Index) Over the long term, total shareholder returns (TSR) are roughly 50% price/50% dividends. INCOME AS PRICE INCOME TOTAL PERCENTAGE DECADE APPRECIATION COMPONENT RETURN OF TOTAL RETURN 1
Slide 14: Investment Performance
Thornburg Investment Income Builder Fund Investment Performance AVERAGE ANNUAL TOTAL RETURNS (%) QTD YTD 1-YR 3-YR 5-YR 10-YR INCEPTION A Shares TIBAX (Incep: 12/24/2002) 30-day SEC Yield: 2.63% | TTM Yield: 4.70% Without sales charge -0.60 11.16 28.90 6.59 7.68 7.78 8.96 With sales charge -5.06 6.1
Slide 15: Quarterly Total Returns
Thornburg Investment Income Builder Fund Quarterly Total Returns I Shares 25% 15% 5% -5% -15% -25% -35% 4Q03 2Q04 4Q04 2Q05 4Q05 2Q08 4Q08 2Q09 4Q09 2Q10 4Q10 2Q11 4Q11 2Q12 4Q12 2Q13 4Q13 2Q14 4Q14 2Q15 4Q15 2Q16 4Q16 2Q17 4Q17 2Q18 4Q18 2Q19 4Q19 2Q20 4Q20 2Q06 4Q06 2Q07 4Q07 2Q21 Past performance
Slide 16: Flexibility with Fixed Income
Thornburg Investment Income Builder Fund Flexibility with Fixed Income We buy bonds when risk-adjusted returns are attractive. 50% 25% 45% IIB Cash & FI 40% U.S. HY: Yield to Worst 20% Fixed Income as a Percent of Portfolio 35% European HY: Yield to Worst 30% 15% Yield to Worst 25% 20% 10% 15% 10% 5
Slide 17: Quarterly Distributions
Thornburg Investment Income Builder Fund Quarterly Distributions Cents per I Share (TIBIX) Q1 Q2 Q3 Q4 Total 2003 14.5¢ 14.5¢ 2004 11.7¢ 13.6¢ 16.0¢ 22.7¢ 64.0¢ 2005 11.6¢ 14.2¢ 18.0¢ 29.7¢ 73.5¢ 2006 14.4¢ 18.0¢ 21.2¢ 35.0¢ 88.6¢ 2007 16.2¢ 20.6¢ 23.6¢ 39.0¢ 99.4¢ 2008 19.8¢ 23.8¢ 28.0¢ 38.3¢ 109.9
Slide 18: Consistently Delivered a 4%+ Yield Since Inception
Thornburg Investment Income Builder Fund Consistently Delivered a 4%+ Yield Since Inception 9% 8% 2003 – 2020 IIB Yield Dividend: 3.5% CAGR 7.9% Blended Index 7% NAV: 3.3% CAGR Bloomberg Barclays U.S. Corp 6.6% 6.5% 6.6% 6% CPI 5% 5.5% 5.0% 5.1% 5.0% 5.0% 4.8% 4.8% 4% 4.2% 4.2% 4.3% 4.2% 4.4% 4.4% 4
Slide 19: Rolling 5-Year Performance
Thornburg Investment Income Builder Fund Rolling 5-Year Performance I Shares 7 6 # of occurrences within each 50 bps average annual 5-year return range 5 4 3 2 1 0 ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] % % % % % % % % % % % % % % % % % % % % % 0. 16 0.84 1.84 2.84 3.84 4.84 5.84 6.84 7.84 8.84 9
Slide 20: Hypothetical $100,000 Investment
Thornburg Investment Income Builder Fund Hypothetical $100,000 Investment A Shares INCOME TODAY: trailing 12-month yield = 4.8% GROWTH IN INCOME: cumulative dividends total $150,874 CAPITAL APPRECIATION: $100,000 $205,335 = $105,335 $6,000 Market Value of Investment $500k Quarterly Dividends $450k
Slide 21: Hypothetical $100,000 with Reinvestment
Thornburg Investment Income Builder Fund Hypothetical $100,000 with Reinvestment A Shares INCOME TODAY: trailing 12-month yield = 4.8% GROWTH IN INCOME: cumulative dividends total $247,510 Beginning shares 8,375 Current shares 21,784 CAPITAL APPRECIATION: $152,657 + reinvested dividends $500,167
Slide 22: Appendix
Appendix Thornburg
Slide 23: Supply / Demand Backdrop
Thornburg Investment Income Builder Fund Supply / Demand Backdrop Ample firepower in the system Source: BCA Research 23
Slide 24: QE (or lack thereof) Likely to Influence Return Dispersion
Thornburg Investment Income Builder Fund QE (or lack thereof) Likely to Influence Return Dispersion Recency bias (growth / quality) could be challenged in this environment Source: SG Cross Asset Research 24
Slide 25: 1. Taiwan Semiconductor
Thornburg Investment Income Builder Fund 1. Taiwan Semiconductor $531 USD Billion Market Capitalization, Net Cash = 2.5% of Equity Market Capitalization, 1.90% Dividend Yield. Share price declined 28% from 1/14/20 to 3/19/2020, recovered to new highs in Q1 2021. 2020: Revenue +25% YoY, 2020 EPS +50%
Slide 26: 2. Vodafone
Thornburg Investment Income Builder Fund 2. Vodafone 36.3 Billion EUR Market Capitalization, 41 Billion EUR Net Financial Debt, 6.90% Dividend Yield. Vodafone’s share price declined 37% from 2/19/2020 to 3/16/2020, inconsistent partial share price recovery since then. Minority interest IPO of its ce
Slide 27: 3. Orange SA
Thornburg Investment Income Builder Fund 3. Orange SA 25 Billion Euro Market Cap, 31B EUR net debt, preferreds, & minorities. 7.49% Dividend Yield. Share px -30% from 2/19/20 to 3/16/20, very modest recovery since then. 2020 Revenue & EBITDA +0.1%, -1% YoY. Orange owns c40k wireless broadcast towers
Slide 28: 4. Total SA
Thornburg Investment Income Builder Fund 4. Total SA 132EUR Billion Market Capitalization, 41B Net Debt, 6.49% Dividend Yield. Total’s share price declined 56.7% from 1/6/20 to 3/18/2020, partially recovered from its March 2020 low. Annual EBITDA has fluctuated between $16.5 and $45.5 billion over t
Slide 29: 5. Broadcom
Thornburg Investment Income Builder Fund 5. Broadcom $203 Billion Equity Market Capitalization, $236 Billion Enterprise Value, 2.97% Dividend Yield. Broadcom’s share price declined 48% from 2/12/2020 to 3/18/2020, now more than fully recovered to a higher price. FY 2020 Result: Revenue +5.7%. FY 202
Slide 30: 6. Samsung
Thornburg Investment Income Builder Fund 6. Samsung $357USD Billion Equity Mkt Capitalization, $282 Billion Enterprise Value, $75 Billion Net Cash. 4.06% Dividend Yield. First half 2021 Result: Revenue +19%, EBITDA +28% YoY to $36 Billion. SAMSUNG 100,000.0 90,000.0 80,000.0 70,000.0 60,000.0 50,000
Slide 31: 7. China Mobile, Ltd.
Thornburg Investment Income Builder Fund 7. China Mobile, Ltd. 820 Billion RMB ($127 Billion USD) Market Capitalization. Net Cash at 12/31/20 = 38% of Market Cap, EV = $77 Billion USD. 7.22% Dividend Yield. Share price declined 37% from 1/24/20 to 12/31/20. First half 2021 Service Revenue +9.8% YoY,
Slide 32: 8. CME Group
Thornburg Investment Income Builder Fund 8. CME Group (Formerly Chicago Mercantile Exchange): $72 Billion Market Capitalization, $3 Billion Net Debt, 3.13% Trailing Year Dividend Yield. CME share price declined 37.6% from 2/23 to 3/23/2020, now mostly recovered from March 2020 low. 2020 revenue flat
Slide 33: 9. AbbVie, Inc.
Thornburg Investment Income Builder Fund 9. AbbVie, Inc. $196 Billion Equity Market Cap, $74B Net Debt, 4.6% Dividend Yield. AbbVie’s share price declined 34% from 2/12/2020 to 3/23/2020, prior to rising to new heighs over the subsequent 10 months. First half revenue and EBITDA both increased +48% Y
Slide 34: 10. JPMorgan Chase
Thornburg Investment Income Builder Fund 10. JPMorgan Chase $509 Billion Equity Market Cap, 13% Common Equity Tier 1 Capital at 6/30/21, 2.44% Dividend Yield. JPM’s share price declined -42.5% from 2/20/20 to 3/23/20, now fully recovered to new highs. 2020 Result: Revenue +4% YoY, Pre-tax/Pre-Provis
Slide 35: www.thornburg.com
www.thornburg.com Before investing, carefully consider the Fund’s investment goals, risks, charges, and expenses. For a prospectus or summary prospectus containing this and other information, contact your financial advisor or visit thornburg.com. Read them carefully before investing. Not FDIC Insure
Thornburg Investment Management — Q3 2021 Earnings Presentation on 6ix