M&g Plc · LSE:MNG
M&g — M&G Wealth — Investor Presentation (October 2022)
20 slides from M&g's investor presentation, Oct 11, 2022
Slide 1: Strategy update – Model Portfolio Service
Strategy update – Model Portfolio Service 11 October 2022 This is just for UK advisers – it’s not for use with clients
Slide 2: Important information
This presentation is prepared for information only and does not contain or constitute investment advice or recommendation and is accurate at the time of issue. The views expressed herein are subject to change without further notice. Neither M&G Wealth, nor any of its associates, nor any director, or
Slide 3: Welcome and Agenda
Welcome Agenda 1. Overview of M&G Wealth Model Portfolio Services • Portfolio ranges • Managing investments 2. Strategic Asset Allocation Insights • Equity: Asia & Japan • Bonds: UK Gilts & Emerging Market bonds 3. Working with Advisers 4. Q&A Speakers Sean Hawkins, Head of MPS Business Development
Slide 4: Model Portfolio Service - Ranges
Model Portfolio Service - Ranges Passive Hybrid Global ESG Themes Low cost Majority Active Active Invests in regions Invests in regions Invests in global funds Uses active funds with Impactful & Thematic ESG incorporated Strategies No ESG screening Active, targeted approach to ESG themes Decreasing
Slide 5: Investment process overview
Investment process overview • Constructed around specific client needs and objectives Strategic Asset Allocation • Uses expectations of future returns and volatility • Takes long term views on different regions and asset classes • Process designed to guard against behavioural bias Manager Oversight
Slide 6: Performance drivers – Our Estimates
Performance drivers – Our Estimates Strategic Asset Fund Selection Allocation 0 – 20% 75 – 90% Investment Outcome Tactical Views Portfolio Construction & Risk contribute to 5 – 15% overall outcome
Slide 7: Risk management
Risk management An independent Investment Risk M&G Wealth Investments is an team within M&G reviews FCA regulated, UK domiciled portfolio risks and exposures on a Investment Manager. regular basis. Market Regulatory risk Quantitative risk limits are set at the portfolio level to govern the Fund perf
Slide 8: Strategic Asset Allocation
Strategic Asset Allocation Our long term views
Slide 9: Strategic Asset Allocation comparison by range
Strategic Asset Allocation comparison by range M&G Wealth relies on the team behind PruFund to develop the portfolio asset allocation. MPS Passive 5 MPS Hybrid 5 PruFund Growth Cash Cash Cash FI.EMD FI.EMD UK UK UK FI.Global HY Europe FI.Global HY Cash Cash Cash Europe US Govies US Govies North… Fix
Slide 10: Asian Equities
Asian Equities Positive long-term view on Asian equites Sample of assets, showing real yield against an assessment of neutrality 20% 15% Greater economic policy flexibility compared to history 10% Lower domestic inflation outlook than West Real yield* 5% Increasingly competitive trade position
Slide 11: Japanese equities
Japanese equities Corporate reform has made Japan more competitive 10 year total return by equity markets: Valuation vs Fundamentals 15 Hiding in plain sight 13 11 Total return CAGR (%) 9 7 5 3 1 -1 S&P500 TOPIX Euro Stoxx FTSE UK Hang Seng Shanghai From EPS & DPS From PE Past performance is not a g
Slide 12: Why now?
Why now? Co-ordinated / state sponsored campaign to drive corporate improvement Japan Corporate Abenomics Stewardship Ito 3rd Arrow Review Governance Code Code (2013) (2014) (2014) (2015) Revised New Revised amendment Corporate Stewardship Revised Governance to Companies Code Act ‘Fair M&A Code (201
Slide 13: The size of opportunity
The size of opportunity Multiple sources of upside opportunity Balance Sheet Income Statements Industry Structure Cash & cross shareholding Pricing Duplicative cost Working capital Product focus Labour productivity Real estate E-commerce Pricing power > 50% upside? > 50% upside? > 50% upside? 13
Slide 14: We don't own Gilts
We don’t own Gilts Even with the sharp recent move upwards, yields remain well below inflation. We expect continued pressure on UK finances from energy costs, healthcare, and social care. Underlying government debt forecast as a percentage of national income (23 Who has bought Gilts since March 2009
Slide 15: Emerging Market Debt
Emerging Market Debt We have a positive long-term view on emerging market bonds due to positive real yields, reduced debt levels relative to GDP, lower inflation levels and diversification within the asset class Real yield: 10-year sovereign yield* minus forward looking inflation expectations 4% 2%
Slide 16: Emerging Market Debt
Emerging Market Debt Diversification within the asset-class has increased significantly over the past 30 years 80 80% 73% 73 70 67 67 70% 65 65 61 62 60 55 60% 45% 50 50% 44 41 38 38 39 40 40% 33 33 32 31 31 31 30 26 27 30% 24 22 19 20 16 16 20% 14 10 10% 0 0% 1993 1994 1995 1996 1997 1998 1999 2000
Slide 17: How we support advisers
How we support advisers Support through Understand our model Engage your clients Keep you updated: implementation and beyond portfolios: • Client guides • Weekly market • Dedicated Business • Due Diligence guides commentary Development Manager • Monthly factsheets • Quarterly Investment (BDM) • Mont
Slide 18: Questions?
Questions?
Slide 19: Find Out More
Find Out More Website: Model Portfolio Service Diversification (mandg.com) within the asset-class has increased significantly over the past 30 years Adviser Support: MPSinfo@mandg.com Business Development Team Email Mobile Sean Hawkins, Sean.Hawkins@mandg.com 07702 847973 Head of Business Developmen
Slide 20: M&G wealth
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