20141231_Fund Manager Presentation_CED_EN - E

Carmignac Portfolio Emerging Discovery
12th February 2015
1
An experienced management team
Edouard CARMIGNAC – Chief Investment Officer
CROSS ASSET
Frédéric
LEROUX
INTERNATIONAL
BONDS
Rose
OUAHBA 19
Laurent CHEBANIER
25
Country risk analyst
Charles
ZERAH
Julien CHERON
16
12
Quantitative analyst
19
Carlos
GALVIS
16
Keith
NEY
15
Pierre
VERLÉ
EUROPEAN
EQUITIES
Muhammed
YESILHARK 11
Malte
HEININGER 8
Huseyin
YASAR
6
Saiyid
HAMID
8
EMERGING
EQUITIES
Simon
PICKARD 22
Xavier
HOVASSE 16
David
Y. PARK
10
Edward
COLE
15
COMMODITY
EQUITIES
Michael
HULME
Simon
LOVAT
17
Pierre-Edouard
Yassine
6
BONENFANT 3
BASRAOUI
SECTOR ANALYSTS
Vincent STEENMAN
PORTFOLIO
ADVISORS
Team Leader
Industry
Didier
SAINT-GEORGES
27
Fund Manager
10
Haiyan
LI-LABBÉ 14
12
MULTI-STRATEGY
9
Obe EJIKEME
Quantitative equity analyst 11
Antoine COLONNA
Consumption
22
Sandra
CROWL
23
Global Research
Coordinator
2
Analyst
Matthew WILLIAMS
20
Finance
Jean
MÉDECIN
MIC
Tim JAKSLAND
Innovation
20
Years of experience
23
The Emerging Markets Team
SIMON PICKARD
22-year experience
 Head of Emerging Markets Team
– Portfolio Manager
 Joined Carmignac Gestion in 2000
XAVIER HOVASSE
16-year experience
DAVID YOUNG PARK
10-year experience
 Co-Portfolio Manager of Carmignac
Portfolio Emerging Discovery
 Covers Asia ex-Greater China
 Joined Carmignac Gestion in 2007
 Co-Portfolio Manager
of Carmignac Portfolio Emerging Discovery
 Covers Latin America
 Joined Carmignac Gestion in 2008
HAIYAN LI-LABBÉ
14-year experience
EDWARD COLE
15-year experience
 Co-Portfolio Manager of Carmignac
Portfolio Emerging Patrimoine
 Covers Eastern Europe, Middle East and
Africa (EMEA)
 Joined Carmignac Gestion in 2013
 Analyst
 Covers Greater China
 Joined Carmignac Gestion in 2011
Source: Carmignac Gestion, 30/01/2015
3
A “Small” Team and Low Turnover Means:
A Big Commitment to On-The-Ground Research
Fund Managers
RUSSIA
Edouard
Carmignac
Simon Pickard
Xavier Hovasse
David Park
CHINA
TURKEY
QATAR
U.A.E
THAILAND
INDIA
VIETNAM
MEXICO
COLOMBIA
Muhammed
Yesilhark
Edward Cole
PHILIPPINES
Analysts
Haiyan Li-Labbé
BRAZIL
ARGENTINA
JAPAN
SOUTH KOREA
TAIWAN
SOUTH
AFRICA
Matthew Williams
Antoine Colonna
Source: Carmignac Gestion, 30/01/2015
4
Carmignac Portfolio Emerging Discovery
Within Carmignac Gestion Emerging Markets Funds Range
EMERGING MARKET EQUITIES
CARMIGNAC EMERGENTS
CARMIGNAC PORTFOLIO EMERGING DISCOVERY
A small and midcap fund: average weighted market cap of EUR 3.3 bn
A “frontier” markets exposure: 36% currently
Assets: 309.15 Million €
55 positions
EMERGING MARKET DIVERSIFIED
CARMIGNAC PORTFOLIO EMERGING PATRIMOINE
Source: Carmignac Gestion, 30/01/2015
5
Carmignac Portfolio Emerging Discovery
Performance of the Fund (5Y)
160
150
Carmignac Portfolio Emerging
Discovery A EUR acc
+48.51%
140
130
120
110
Reference Indicator*
+36.68%
100
90
*50% MSCI EM SmallCap (EUR) + 50% MSCI EM MidCap (EUR), (Reinvested net dividends, rebalanced quarterly)
Source: Carmignac Gestion at 30/01/2015
From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested
Past performance is not a guarantee of future returns
6
Uneven GDP growth in Emerging Markets
2014 GDP Growth Forecasts
DM
Less than 0
Between 0 and 1
Between 1 and 2
Between 2and 4
Between 4 and 6
Above or equal 6
EM
Source: Carmignac Gestion – Interantional Monetary Fund April 2014
7
Process is Both Top-Down and Bottom-Up
MACRO / THEMATIC VIEWS FORMED BY:
T
O
P
D
O
W
N
Close interaction with cross-asset and fixed income teams
Daily investment meeting with whole team
Scheduled meetings as well as constant interaction
Access to independent macro analysis
MICRO / BOTTOM-UP VIEWS FORMED BY:
B
O
T
T
O
M
U
P
Close interaction with sector analysts, formal monthly sector meetings
“Dual coverage” of major parts of our universe
EM team analyst coverage : analyst responsibility is geographic
Access to alternative information sources
Source: Carmignac Gestion, 30/01/2015
8
Risk Analysis Specific to Regions and Countries
Proprietary database and indicators
THINGS WE ARE LOOKING FOR
BALANCE OF PAYMENTS
BANKING SYSTEM RISKS
EXTERNAL VULNERABILITIES
GROWTH DYNAMICS
INFLATION DYNAMICS
Source: Carmignac Gestion, 30/01/2015
9
What we look for an Investment
INVESTMENT
MACRO
UNDERPENETRATION
STRONG FCF
=(
MACRO
+
UNDERPENETRATION
+
STRONG FCF
)
The Fund looks for strong macro fundamentals (growth outlook, current account, currency, inflation)
Underpenetrated sectors & long term growth
Companies with a strong FCF profile i.e capital light business that can self finance its growth
Source: Carmignac Gestion, February 2015
10
Key Valuation & Country Metrics
COUNTRY METRICS
CURRENT ACCOUNT
CURRENT ACCOUNT
+
GROWTH
+
INFLATION
+
EXT. VULNERABILITIES
The analysis looks at CA surplus or deficit, how it is financed and whether it is sustainable
GROWTH
Analysis of inflation dynamics and sub-components (food, transport, clothing, health, housing)
INFLATION
Looking at growth dynamics and its sub-components (Consumption, Invest, Exp, Stocks, Govt)
EXTERNAL VULNERABILITIES
Looking at Net international investment positions, FX reserves, external debt
+
VALUATION METRICS
CROCI
FCF(Y) AFTER M.CAPEX
CASH REALIZATION RATIO
CROCI
+
Cash return on capital invested
Free cash flow yield after maintenance Capex
Operational Cash flow / Net income
=
OVERALL SCORE
FCF(Y) AFTER M.CAPEX
POSITION SIZING
11
+
CASH REALIZATION RATIO
Key Features and Attributes
DISCOVERY
Pick the long term winners from the small and mid-cap space with a third invested in Frontier
+
TURNOVER
The fund has a proper five year holding period with a low turnover of 20% on 50 to 60 stocks
+
LONG TERM
Above quarterly or annual earnings, the Funds look beyond that at the long term
+
EXPOSURE
The Fund aims to give investors EM exposure without leveraging on cash exposure
+
FUND BEHAVIOR
=
Provided most of its alpha through downside protection in the 2011 & 2013 bear markets
CARMIGNAC PORTFOLIO EMERGING DISCOVERY
Source: Carmignac Gestion – February 2015
12
Key Structural Guidelines
LIQUIDITY
Liquidity is a key criterion - more than 50% of the portfolio can be liquidated in 3 days
+
CAPITAL LIGHT BUSINESS
I.e. negative working capital business such as distribution, insurance, convenience stores etc
+
SECTOR ALLOCATION
Reflects investments in underpenetrated sectors + 5 to 10y specific growth stories
+
COUNTRY ALLOCATION
We have a preference for economies with surpluses in their balance of payments.
+
COUNTRY LIMIT
The fund has a 15% limit on country level deviation from benchmark
=
PICK THE RIGHT :
+
COUNTRIES
Source: Carmignac Gestion – February 2015
13
SECTORS
+
STOCKS
Chinese « New Normal » & Economic Momentum
13%
12%
11%
10%
9%
8%
7%
6%
5%
4%
%
40
35
30
25
20
15
10
5
0
OFFICIAL GROWTH
BETWEEN 6% AND 7% GROWTH
BETTER GROWTH QUALITY
STRUCTURAL ECONOMIC REFORMS
7%
6%
NO HARD-LENDING
CHINESE « NEW NORMAL »
=
PROPERTY FAI YOY% GROWTH
10%
LENDING AND INFLATION RATES
8%
12m LENDING RATE
6%
4%
2%
0%
Source: Carmignac Gestion, 30/01/2015
14
CPI YoY%
Credit Underpenetration Theme
We have three banks in the Fund:
PRIVATE DEBT TO GDP
PERU
INTERGROUP FINANCIAL
PHILIPPINES
PHILIPPINE NTL BANK
COLOMBIA
BANCO DAVIVIENDA
Our investments in banks are a perfect illustration of
the underpenetration themes we are looking for:
LOW PRIVATE DEBT TO GDP
CREDIT UNDERPENETRATION
LOW DEPOSITS
=
Source: Carmignac Gestion, 30/01/2015
15
10 YEAR GROWTH STORY AHEAD
India: Leveraging the Investment Rebound
MODI’S
ELECTION
REFORMS
PROCESS
IMPROVING
EXTERNAL
IMBALANCES
INDIA
in
OUR FUND
11.6%
BENCHMARK
7.9%
SHREE CEMENT
Proxy to economic growth
Long term drivers intact: population growth, urbanisation, economic growth, etc.
STRONG FCF GROWTH
Competitive advantage and most attractive prospects
Right location (present in Northern India) + Right timing + Cost Leadership
INFRASTURCTURE PLAN
SHREE CEMENT - FCF GENERATION
30000
20000
10000
0
-10000
-20000
FY11
FY12
Capital expenditure (INR mn)
Source: Company Data, Deutsche Bank AG, 4 April 2014 + SocGen 2014
16
FY13
FY14E
FY15E
FY16E
Free cash flows before Capex (INR mn)
Colombia: One of our Favourite Markets
SANTOS
REELECTION
PEACE
PROCESS
GROWTH &
INFRASTRUCTURE
INVESTMENT
COLOMBIA
in
CEMENTOS ARGOS
BANCO DAVIVIENDA
OUR FUND
7.8%
BENCHMARK
0.7%
+
CEMEX LATAM
Biggest position in Colombia
$50bn infrastructure project
Retail bank doing SME lending and
exploiting low mortagage penetration
Project which is 15% of GDP to build roads
across rough terrrain requiring a big investment
160.00%
COLOMBIA: 4-LANE MOTORWAY
TO BE BUILT (KILOMETRES)
140.00%
120.00%
100.00%
80.00%
60.00%
40.00%
20.00%
0.00%
Colombia
India
Russia
Brazil
China
Private Debt to GDP
Source: Carmignac Gestion, 30/01/2015
17
Mexico: Reforms starting to Bear Fruits
LABOR
MARKET AND
EDUCATION
REFORM
TAX REFORM
ENERGY,
FINANCIAL,
TELECOM REFORM
MEXICO
in
OUR FUND
9.8%
BENCHMARK
3.5%
FIBRA TERRAFINA
MEXICAN EXPORTS % PIB
BIGGEST POSITION OF THE FUND
35%
30%
30%
Manufactured
Exports % GDP
ATTRACTIVE SECTOR
25%
OFFER A HIGH YIELD DIVIDEND
20%
SOME CURRENCY HEDGE (USD RENTAL REVENUES)
15%
10%
5%
Oil Exports
% GDP
DIVERSIFIED EXPOSURE TO THE MEXICAN ECONOMY
4%
0%
Source: Carmignac Gestion,30/01/2015
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EXPOSURE MOSTLY TO THE INDUSTRIAL SEGMENT
19
Our Frontier Markets Exposure
LATAM
COLOMBIA
7.8
Almacenes, B.Davivienda, Cementos A, Cemex L, Gran Tierre, Terpel
PERU
3.3
Alicorp, Inretail Peru, Intergroup Financial
SAUDI ARABIA
0.9
Jarir Marketing
UNITED ARAB EMIRATES
5.1
Aramex, Emaar Malls
KENYA
3.7
East African Breweries, Safaricom
NIGERIA
0.7
Guinness Nigeria
SLOVENIA
1.1
Krka DD
PHILIPPINES
9.2
Holcim, Ictsi Int’l Container, LT Group, Phillippine Ntl Bank
SRI LANKA
2.0
John Keells
VIETNAM
1.6
Vietnam Dairy Products
EEMEA
ASIA
TOTAL FRONTIER MARKETS
35.5%
20
A Balanced and Diversified Thematic Portfolio
BREAKDOWN AS %
C
Y
C
L
I
C
A
L
D
E
F
E
N
S
I
V
E
31/12/2014
FINANCE
19.9%
LEISURE AND AUTOMOBILE
12.7%
ENERGY AND MATERIALS
12.2%
INDUSTRY
11.4%
CONSUMER GOODS
23.6%
TECHNOLOGY
13.8%
TELECOMMUNICATIONS
6.2%
Source: Carmignac Gestion, 30/01/2015
21
Geographic Exposure
Geographic exposure as % of Carmignac Portfolio Emerging Discovery
RUSSIA
1.9
SLOVENIA
2.4
MEXICO
SAUDI ARABIA
9.8
NIGERIA
COLOMBIA
PERU 3.3
CHILI 2.8
0.9
THAILAND
5.1
KENYA 3.7 EMIRATES 11.6
4.4
2.0
BRAZIL
2.6
Traditional Markets
SOUTH
AFRICA
Frontier Markets
Source: Carmignac Gestion, 30/01/2015
22
9.0
HONG KONG/
MACAO
SRI
INDIA LANKA
3.2
7.8 SOUTH KOREA
CHINA
0.9
UNITED
ARAB
0.7
7.8
5.4
TURKEY
1.1
1.6
9.2
2.8
INDONESIA
TAIWAN
VIETNAM
PHILIPPINES
Carmignac Portfolio Emerging Discovery: Top 10 Holdings
Country
Sector
% Assets
1
FIBRA TERRAFINA
Mexico
Financials
3.94
2
BHARTI INFRATEL
India
Telecommunication Services
3.91
3
SINA
China
Information Technology
3.19
4
ARAMEX
United Arab Emirates
Industrials
3.03
5
SHREE CEMENT
India
Materials
2.98
6
LT GROUP
Philippines
Consumer Staples
2.75
7
SA SA
Hong Kong
Consumer Discretionary
2.65
8
PHILIPPINE NATIONAL BANK
Philippines
Financials
2.30
9
GIANT MANUFACTURING
Taiwan
Consumer Discretionary
2.29
10
CLICKS
South Africa
Consumer Staples
2.29
Source: Carmignac Gestion, 30/01/2015
23
Disclaimer
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weder ganz noch teilweise reproduziert, verbreitet oder weitergegeben werden. Es stellt weder ein Zeichnungsangebot noch eine Anlageberatung
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Skala von 1 (geringstes Risiko) bis 7 (höchstes Risiko); Risiko 1 kann nicht mit einer risikofreien Anlage gleich gesetzt werden. Dieser Indikator kann
sich im Laufe der Zeit verändern.
Wertentwicklungen der Vergangenheit lassen keine Rückschlüsse auf zukünftige Wertverläufe zu. Die Kosten sind in den Wertentwicklungen
enthalten.
Für bestimmte Personen oder Länder kann der Zugang zu den Fonds beschränkt sein. Sie dürfen insbesondere weder direkt noch indirekt einer „USPerson“ wie in der US-amerikanischen „S Regulation“ und/oder im FATCA definiert bzw. für Rechnung einer solchen US-Person angeboten oder
verkauft werden.
Die Fonds sind ist mit einem Kapitalverlustrisiko verbunden. Die Risiken und Kosten sind in den Wesentlichen Anlegerinformationen (WAI) / im
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www.carmignac.de / www.carmignac.at zur Verfügung und sind auf Anforderung bei der Verwaltungsgesellschaft bzw. in Österreich bei der Ersten
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Anlegerinformationen / die Kundeninformationsdokumente sind dem Zeichner vor der Zeichnung auszuhändigen.
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Nicht vertragliches Dokument, 09/02/2015
Carmignac Gestion – Portfolioverwaltungsgesellschaft (von der französischen Finanzmarktaufsicht AMF
am 13.03.1997 unter der Nr. GP 97-08 zugelassen)
SA [Aktiengesellschaft französischen Rechts] mit einem Stammkapital von 15.000.000 € - Handelsregister Paris B 349 501 676
24 Place Vendôme – 75001 Paris – Tel : +33 1 42 86 53 35
Carmignac Gestion Luxembourg – Tochtergesellschaft von Carmignac Gestion
OGAW-Verwaltungsgesellschaft (von der luxemburgischen Finanzmarktaufsicht CSSF am 10.06.13 zugelassen)
SA [Aktiengesellschaft luxemburgischen Rechts] mit einem Stammkapital von 23.000.000 € - Handelsregister Luxemburg B67549
City Link -7, rue de la Chapelle L-1325 Luxembourg – Tel: +352 46 70 60 1
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