JPMorgan Asian Investment Trust plc Investment Manager

Transcription

JPMorgan Asian Investment Trust plc
Investment Manager Presentation
Annual General Meeting
28 January 2015
Performance
To end September 2014
Trailing Returns
4Q
2014^
FY to
30th
Sept 14
JPM Asian Investment Trust NAV
6.9%
6.0%
6.0%
25.7%
24.2%
179.1%
JPM Asian Investment Trust Share price
7.3%
5.2%
5.2%
20.1%
21.2%
215.4%
MSCI AC Asia ex Japan Index (NDR)*
4.1%
8.1%
8.1%
31.0%
37.3%
153.0%
NAV Excess Returns (Arithmetic)
2.8%
-2.2%
-2.2%
-5.3%
-13.1%
26.1%
1 Year
3 Years
5 Years
Since
Incep’n**
Calendar Returns
2014
2013
2012
2011
2010
2009
JPM Asian Investment Trust
11.3%
2.9%
13.6%
-23.5%
28.9%
44.9%
MSCI AC Asia ex Japan Index(NDR)*
11.3%
1.2%
17.0%
-16.7%
23.4%
53.2%
Excess Returns
-0.05%
1.7%
-3.4%
-6.8%
5.5%
-8.3%
* Prior to 1/1/01, MSCI AC Asia ex Japan (GDR).
** Inception date = 12 Sep 1997
^ Figures to 31 Dec 2014
Source: J.P. Morgan Asset Management, as at 30 Sep 2014
NDR is net dividends reinvested. GDR is gross dividends reinvested. AC is All Countries. Past performance is not an indication of future performance. Performance is stated net of fees.
1
Performance since inception
400
JPM Asian Investment Trust
323.6
MSCI AC Asia ex Japan (NDR)
293.0
Share Price
263.4
200
100
50
25
9/97
4/99
11/00
5/02
12/03
7/05
2/07
9/08
4/10
11/11
Inception date = 12 Sep 1997
* Prior to 1/1/01, MSCI AC Asia ex Japan (GDR). Source: J.P. Morgan Asset Management, as at 31 Dec 2014. Data is re based as at inception date on a log basis.
Past performance is not an indication of future performance
2
5/13
12/14
2014 Attribution Analysis – 1 year to 30 Sep 2014
Major Detractors: Stock selection in North Asia
Major Contributors: Overweight India and Stock selection in Malaysia
Average
Over/Under
Weight (%)
Portfolio
Return (%)
Benchmark
Return (%)
Country +
Currency
Selection (%)
Stock
Selection (%)
Total (%)
Malaysia
-3.0
21.5
5.1
0.08
0.34
0.42
India
1.6
38.4
37.5
0.37
-0.03
0.33
Singapore
-2.7
9.8
4.1
0.14
0.14
0.28
Philippines
-0.6
39.1
18.4
-0.01
0.06
0.05
Indonesia
-1.3
24.4
19.7
-0.21
0.18
-0.03
Thailand
1.5
10.1
11.3
-0.06
-0.11
-0.16
Taiwan
-0.6
9.3
12.1
0.03
-0.29
-0.27
Hong Kong
-0.3
-1.1
5.3
0.06
-0.54
-0.48
Korea
0.6
-4.0
0.3
0.00
-1.03
-1.03
China
6.0
1.7
4.4
-0.26
-0.78
-1.04
Cash
-1.0
0.0
0.0
-0.23
0.00
-0.23
Total
0.0
6.0
8.1
-0.09
-2.07
-2.16
Source: FactSet, J.P. Morgan Asset Management, as at 30 Sep 2014
Past performance is not indicative of future performance. For illustrative purposes only. Subject to change at the discretion of the Investment Manager without notice.
3
Top ten contributors to active returns – 1 year to 30 Sep 2014
Top 10 Contributors (%)
Country
Sector
Tata Motors Limited
Tencent Holdings Ltd.
HDFC Bank Limited
Mahindra & Mahindra Ltd.
Beijing Enterprises Water Group Limited
Alibaba Group Holding Ltd. Sponsored ADR
Korea Investment Holdings Co., Ltd.
Delta Electronics, Inc.
True Corp. Public Co., Ltd.
Advanced Semiconductor Engineering, Inc.
India
China
India
India
China
China
Korea
Taiwan
Thailand
Taiwan
Consumer Discretionary
Information Technology
Financials
Utilities
Financials
Telecommunication Services
Top 10 Detractors(%)
Country
Sector
Hyundai Heavy Industries Co., Ltd.
SK Innovation Co., Ltd
China Cinda Asset Management Co., Ltd.
MGM China Holdings Limited
Great Wall Motor Co., Ltd.
Sino-Thai Engineering & Construction Public Co. Ltd.
Hon Hai Precision Industry Co., Ltd.
CNOOC Limited
Agricultural Bank of China Limited
China Construction Bank Corporation
Korea
Korea
China
Hong Kong
China
Thailand
Taiwan
China
China
China
Industrials
Energy
Financials
Industrials
Energy
Financials
Financials
Average
Portfolio
Weight
Average
Benchmark*
Weight
Stock
Return
Contributions
to Active
Returns
1.68
4.17
1.95
1.09
0.99
0.03
0.90
1.25
0.13
1.18
0.17
2.35
0.40
0.18
0.07
0.00
0.05
0.36
0.05
0.22
64.75
41.54
58.10
68.36
67.16
32.19
35.94
33.21
52.70
24.68
0.66
0.64
0.64
0.42
0.33
0.26
0.26
0.19
0.19
0.17
Average
Portfolio
Weight
Average
Benchmark*
Weight
Stock
Return
Contributions
to Active
Returns
-47.09
-42.88
-31.89
-26.56
-32.09
-46.35
38.99
-27.77
-6.73
-3.35
-0.71
-0.53
-0.49
-0.47
-0.34
-0.31
-0.29
-0.26
-0.26
-0.25
1.14
1.09
0.72
0.83
0.79
0.14
0.00
0.79
1.33
2.73
0.28
0.23
0.04
0.12
0.16
0.00
1.10
1.06
0.33
1.75
* MSCI AC Asia ex Japan (NDR)
Past performance is not indicative of future performance. The companies/securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. However, it cannot be
assumed that these types of investments will be available to or will be selected by the fund in the future. Subject to change at the discretion of the Investment Manager without notice.
4
Performance of Asian markets in 2013 and 2014 – Big Reversal
MSCI Indices Total Return
Calendar Year 2013
Calendar Year 2014
MSCI JAPAN
24.1
MSCI INDONESIA
MSCI HONG KONG
9.0
MSCI TAIWAN
MSCI PHILIPPINES
7.0
MSCI MALAYSIA
1.8
MSCI CHINA
MSCI CHINA
2.0
MSCI HONG KONG
-0.2
-30
4.5
2.6
-5.0
MSCI KOREA
-20
-10
0
10
20
30
Source: Factset. As at 31 Dec 2014. Indices performance calculated gross of tax with dividends reinvested into the index in GBP.
Indices do not include fees or operating expenses and are not available for actual investment.
Past performance is not indicative of future performance.
5
9.3
MSCI MALAYSIA
-25.1
-40
12.7
MSCI JAPAN
-16.0
MSCI INDONESIA
14.8
MSCI AUSTRALIA
-6.6
MSCI THAILAND
16.8
MSCI SINGAPORE
-4.0
MSCI INDIA
23.9
MSCI TAIWAN
MSCI KOREA
MSCI PHILIPPINES
31.1
MSCI THAILAND
3.7
MSCI SINGAPORE
34.3
MSCI INDIA
5.4
MSCI AUSTRALIA
35.4
-7.0
-20
-10
0
10
20
30
40
2014 Attribution Analysis – Calendar Year 2014
Major Detractors: Stock selection in Hong Kong and China
Major Contributors: Stock selection in India and Thailand – u/w Malaysia
Average
Over/Under
Weight (%)
Benchmark
Return (%)
Country +
Currency
Selection (%)
Portfolio
Return (%)
Stock
Selection (%)
Total (%)
India
2.9
41.7
31.6
0.37
1.11
1.48
Thailand
1.6
33.9
23.7
0.05
0.43
0.49
Singapore
-2.8
17.0
9.4
0.10
0.22
0.31
Malaysia
-3.3
-45.2
-5.1
0.61
-0.44
0.17
Taiwan
-0.9
17.1
16.2
0.03
0.14
0.17
Philippines
-0.4
62.8
33.4
-0.10
0.23
0.13
Australia
0.1
7.1
0.0
0.10
0.00
0.10
Korea
0.7
-3.9
-5.6
-0.16
0.19
0.04
Indonesia
-0.9
45.0
34.5
-0.40
0.29
-0.11
Hong Kong
-1.3
1.6
11.6
0.04
-1.08
-1.04
China
5.4
9.3
14.7
0.04
-1.61
-1.57
Cash
-1.2
0.0
0.0
-0.06
0.00
-0.06
Total
0.0
11.4
11.3
0.60
-0.50
0.10
Source: FactSet, J.P. Morgan Asset Management, as at 31 Dec 2014
Past performance is not indicative of future performance. For illustrative purposes only. Subject to change at the discretion of the Investment Manager without notice.
6
Top ten contributors to active returns – Calendar Year 2014
Top 10 Contributors (%)
Country
Sector
HDFC Bank Limited
China Minsheng Banking Corp., Ltd.
China Pacific Insurance (Group) Co., Ltd.
China Vanke Co., Ltd
Tata Motors Limited
Alibaba Group Holding Ltd. Sponsored ADR
Tencent Holdings Ltd.
Taiwan Semiconductor Manufacturing Co., Ltd.
BDO Unibank, Inc.
Kotak Mahindra Bank Limited
India
China
China
China
India
China
China
Taiwan
Philippines
India
Financials
Financials
Financials
Financials
Financials
Financials
Top 10 Detractors(%)
Country
Sector
Hyundai Heavy Industries Co., Ltd.
MGM China Holdings Limited
SapuraKencana Petroleum Bhd.
SK Innovation Co., Ltd
China Oilfield Services Limited
Ping An Insurance (Group) Company of China, Ltd.
Great Wall Motor Co., Ltd.
China Life Insurance Co. Ltd. (China)
China Resources Gas Group Limited
KB Financial Group Inc.
Korea
Hong Kong
Malaysia
Korea
China
China
China
China
China
Korea
Industrials
Energy
Energy
Energy
Financials
Financials
Utilities
Financials
Average
Portfolio
Weight
Average
Benchmark*
Weight
Stock
Return
Contributions
to Active
Returns
2.33
1.68
0.68
1.37
1.85
0.27
4.28
4.58
0.95
0.39
0.28
0.19
0.31
0.08
0.18
0.00
2.50
3.24
0.10
0.07
67.31
53.72
59.42
57.38
46.46
60.90
20.70
36.40
62.72
49.36
0.98
0.83
0.81
0.56
0.51
0.47
0.33
0.31
0.31
0.29
Average
Portfolio
Weight
Average
Benchmark*
Weight
Stock
Return
Contributions
to Active
Returns
-55.55
-32.62
-50.61
-43.48
-38.86
-9.02
-31.78
-10.45
-20.01
-11.67
-0.89
-0.71
-0.58
-0.57
-0.49
-0.46
-0.40
-0.39
-0.37
-0.36
1.01
1.30
0.93
0.86
1.04
1.51
0.41
0.58
1.11
2.45
0.22
0.11
0.15
0.20
0.14
0.53
0.15
0.70
0.09
0.46
Source: J.P. Morgan Asset Management, as at 31 Dec 2014
Past performance is not indicative of future performance. The companies/securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. However, it cannot be
assumed that these types of investments will be available to or will be selected by the fund in the future. Subject to change at the discretion of the Investment Manager without notice.
7
Fund Positioning
8
Country weightings
As of 31 December 2014

Greater China – fund remains overweight China and underweight Taiwan and Hong Kong

India – fund exposure has increased substantially since last year, partly due to stock performance

ASEAN – we are underweight the ASEAN markets as a whole but remain overweight in Thailand
Country weightings
As of 31/12/2013
32.9
29.3
As of 31/12/2014
26.7
Benchmark* as of 31/12/2014
21.6
18.4 18.0
14.4
14.0 13.5
15.5
12.5
10.0
8.7
8.1
13.5
4.5
6.6
3.0
4.3 3.6
6.3
1.3
2.8 3.4
0.0
1.7 1.6
0.0 1.1 0.0
2.4
4.4
0.0
0.0
-2.6 -1.3
China
Korea
India
Taiwan
Hong Kong
Thailand
Singapore
Indonesia
Philippines
Australia
Malaysia
Cash
Source: J.P. Morgan Asset Management
The Fund is an actively managed portfolio, holdings, sector weights, allocations and leverage, as applicable are subject to change at the discretion of the Investment Manager without notice.
9
Sector weightings
As of 31 December 2014

We have increased our position in financials (especially the banks) and remain overweight in information
technology. We also initiated holdings in the health care sector

We have reduced over overweight in Consumer Discretionary (e.g. Macau Gaming, autos)

Energy, Material and Utilities sectors were also reduced throughout the year.
Sector weightings
42.4
35.0
As of 31/12/2013
As of 31/12/2014
33.7
25.7
24.4
22.2
17.7
21.7
18.1
14.6
6.8 7.2 6.1
Banks
Insurance
9.0
6.0 6.8
Real Estate
Financials
9.4 8.7
3.4 2.7
1.5
7.7
6.1 4.7
8.3
5.1 4.8
8.1
5.2
3.3 4.0
5.3
3.2 4.2
0.0
2.8 1.9
2.6
6.6
5.0
1.2 1.6
Diversified
Financials
0.0
-2.6-1.3
Financials
Information Consumer
Technology Discretionary
Materials
Industrials
Consumer
Staples
Utilities
Health Care
Energy
Telecom
Services
10
Cash
JPMorgan Asian Investment Trust – Top 10 holdings
% Fund
31/12/13
% Fund
31/12/14
B’mark*
31/12/14
Active
6.2
5.4
4.9
+0.5
Taiwan
4.2
5.0
3.5
+1.5
3 Tencent Holdings
China
4.0
4.1
2.4
+1.7
4 China Construction Bank
China
Financials
3.9
3.3
1.9
+1.4
5 HDFC Bank
India
Financials
1.7
3.2
-
+3.2
6 AIA Group
Hong Kong
Financials
3.3
3.2
2.2
+1.1
7 China Minsheng Banking
China
Financials
1.2
3.0
0.3
+2.7
8 China Pacific Insurance (Group)
China
Financials
-
2.9
0.4
+2.5
9 KB Financial Group
Korea
Financials
1.8
2.7
0.4
+2.3
10 DBS Group Holdings
Singapore
Financials
2.2
2.6
0.9
+1.8
28.5
35.4
16.9
18.7
Stock Name
Country
Sector
1 Samsung Electronics
Korea
2 Taiwan Semiconductor Manufacturing
Number of Stocks: Portfolio: 68
Benchmark: 597
Top 20 Holdings
52.5
Top 30 Holdings
66.0
Source: J.P. Morgan Asset Management, as at 31 Dec 2014
The companies/securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell.
The holdings represent the current holdings of the fund. However, it cannot be assumed that these types of investments will be available to or will be selected by the fund in the future.
11
Key positioning

Indian private sector banks are the best managed banks in Asia and will benefit from the impending economic
re-acceleration.

Internet and e-commerce companies in China are taking market share from off-line players, at an
unprecedented speed. We are overweight this sector but wary of valuations.

Within ASEAN, we have a preference for Thailand over markets such as Malaysia and Singapore.

Asian technology stocks are probably the most exposed to the recovery in Developed markets, Asian
consumption and smartphone penetration. We are increasing Taiwan technology and have additional
holdings like AAC in China.

Within China – we are looking to play structural themes such as increase in Healthcare spending and
Environmental related sectors e.g. water and waste treatment.
12
Market Outlook
13
2015 outlook – Contrasting catalysts lead to a measured prognosis
There are reasons to expect a stronger earnings outcome in 2015

The sharply lower price of oil is good for most sectors and economies in Asia

Widespread economic reform across Asia is good for earnings and valuations

Weaker currencies are good for competitiveness and have a positive translation effect

Interest rates are generally declining, especially in China and India
There are some undeniable macro concerns

The strong US Dollar is empirically bad for emerging market equities and debt

Deflation is prevalent globally and exerts a negative effect on demand

Central banks are uncoordinated and in some cases mutually unfriendly
The rally in China is a welcome reminder that stocks and markets that have underperformed and are supported by
low valuations often deliver unexpected and gratifying returns.
In a growth constrained world, growth stocks and sectors will outperform.
14
Oil – the speed of the collapse in the price is more jarring than
the actual price
Brent Crude and WTI Prices
USD
140
WTI Crude Oil (USD/bbl)
Brent Crude Oil (USD/bbl)
120
100
80
60
40
20
0
'09
'10
'11
Source: EIA, IEA, IMF, Deutsche Bank, FactSet
Net demand is world consumption minus world production.
Data reflect most recently available as of 19/1/15.
Source: J.P. Morgan Asset Management "Guide to the Markets - Asia", 1Q 2015.
15
'12
'13
'14
'15
Fundamentally, Asia benefits from falling oil prices
64
GTM - Asia
Oil Imports
Brent Crude Oil Price and EM CPI Inflation
Net imports (imports minus exports) as % of GDP, 2014 IMF Estimates
Year-over-year % change
Thailand
14.0%
Asia Pacific
Emerging Markets
Korea
7.2%
Turkey
6.9%
Taiwan
6.6%
Hong Kong
6.4%
Hungary
5.7%
Philippines
5.2%
India
5.0%
South Africa
4.7%
Japan
4.2%
Indonesia
EM Asia CPI Inflation
120%
8%
80%
6%
40%
3.3%
New Zealand
2.2%
China
2.2%
Brazil
1.6%
Australia
4%
0%
0.6%
Mexico
-0.6%
Malaysia
-0.9%
Vietnam
2%
-4.4%
Iran
-40%
-11.0%
Russia
-12.9%
UAE
-27.1%
-39.7%
-50%
-40%
-80%
-30%
-20%
-10%
0%
10%
20%
Source: IMF, FactSet, J.P. Morgan Asset Management “Guide to the Markets – Asia 1Q 2015.”
Source: J.P. Morgan Asset Management "Guide to the Markets - Asia", 1Q 2015.
16
10%
EM CPI Inflation
Brent Crude
Oil Price
7.3%
Singapore
Saudi Arabia
160%
0%
'04
'06
'08
'10
'12
'14
Accelerating political change and economic reform around Asia
India

Modi will meet expectations, which
were too high at the outset

Various bureaucracy busting
measures have been implemented
already

The investment cycle has bottomed,
and the recovery should be turbocharged by Modi
China

President Xi Jinping is defying the skeptics,
and is pushing painful but necessary reform

“Marketization” could transform the SOEs and
materially boost earnings and efficiency

Social reforms like the one child policy and
Hukou and anti-corruption are bold and farreaching
Japan
Thailand

Politics has stabilized, consumption is
recovering

New Government has approved/revived
major infrastructure and investment
projects


After the cabinet reshuffle and
midterm elections , can PM Abe
regain momentum?

The Third Arrow has disappointed but
now Abe has re-focused

Corporate earnings and consumption
are tracking well
State enterprises are slated for major
upgrading
Korea
Indonesia

Jokowi has taken office with a powerful mandate but he
will have to sharpen his political elbows to be effective

Infrastructure will be the primary focus, especially power
infrastructure and roads

Fuel subsidies have been cut but more is needed

President Park reshuffled her cabinet
and suddenly embraced change

The moribund property market is
responding to new policies – this could be
huge!

Tax policy has been altered to encourage
more dividends and more investment
Source: J.P. Morgan Asset Management, 31 Dec 2014
The opinions and views expressed here are those held by the author at the time of publication, which are subject to change and are not to be taken as or construed as investment advice.
17
New Asian Leaders are deregulating energy prices which reduces the subsidy bill
US$/bbl
India
Gas prices hiked by 33%
Malaysia
~10% fuel price hike
105
Thailand
LPG raised by ~3%
Thailand
Floats LPG Prices for retail
China
25% gasoline tax hike
17% diesel tax hike
India
41% diesel tax hike
Malaysia
Abolishes fuel
subsidies
95
Indonesia
Fuel subsidies abolished for
gasoline, fixed at Rp1,000 for diesel
Thailand
LPG raised by ~3%
NGV raised by ~~10%
85
Thailand
Raises producer level
LPG Prices
India
Diesel prices decontrolled
Direct benefit transfer scheme for LPG
75
China
9% diesel tax hike
Malaysia
~2% gas price hike
(non-power sector)
Indonesia
~30% fuel price hike
65
China
18% diesel tax hike
Indonesia
~23% LPG Hike
55
China
Threshold for windfall tax raised
from US$55/bbl to US$65/bbl
Thailand
Govt. announced intention to float
LPG/NGV prices
45
Sep-14
Sep-14
Sep-14
India
32% diesel tax hike
Oct-14
Source: Company data, Bloomberg, Morgan Stanley Research
18
India
19% diesel tax hike
Oct-14
Nov-14
Nov-14
Dec-14
Dec-14
Jan-15
Thailand – Meeting General, now Prime Minister, Prayuth
Source: Bangkok Post, 16 Aug 2014
http://www.bangkokpost.com/news/local/426993/ncpo-reassures-worried-foreign-investors.
19
Indonesia – Jakarta before and after Jokowi – Optics Matter !
Jakarta before Jokowi
20
Jakarta after Jokowi
Indonesia – JPM ASEAN team meeting with the Energy Minister
Source: J.P. Morgan Asset Management. Data as at 31 Dec 2014.
21
China – Anti corruption campaign blows away expectations
Source Waltham Economy of Asia Review . As at 31 Dec 2014.
22
China – A map of tigers and flies
Corruption investigations announced by the Communist Party's Central Commission for Discipline Inspection since
Xi Jinping's rise to power
Source South China Morning Post
23
Recently, the US Dollar Index (DXY) cleared a critical level, portending sustained
dollar strength
US Dollar Index
160
1985: Plaza Accord
150
Jan 2003 - Nov 2007
Huge Bull Market
Jan 1987 - Jul 1994
The Bull Market
that we missed
140
130
120
110
Jan 2008 - Dec 2008
Collapse !
100
90
80
Aug 1994 - Sep 1998
Asian Crisis
70
60
1973
1975
1978
1981
Source: Bloomberg. Data as at 31 Dec 2014.
24
1984
1986
1989
1992
1995
1997
2000
2003
2006
2008
2011
2014
A Strong Dollar hinders Emerging Market, including Asian,
stock market performance
Relative Asia ex Japan / Developed Markets Equity Performance and Dollar
Index, rebased 1988 = 100
300
120
MSCI AxJ / MSCI the World (DM)
DXY (RHS)
250
110
200
100
150
90
100
80
50
70
'88
'90
'92
'94
'96
'98
'00
'02
Source: J.P. Morgan Asset Management. Data as at 31 Dec 2014.
MSCI AxJ is the MSCI Asia ex Japan Index and MSCI the World DM is the MSCI World Developed Markets
25
'04
'06
'08
'10
'12
'14
The Inflation heat map looks disinflationary
Rising Inflation
Unchanged
Falling Inflation
Central Bank
Central Bank
Policy Rate*
Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Target / Forecast
5.60
( 11/2014)
2.5
2.5
2.0
2.4
1.8
2.5
2.3
2.3
2.0
1.6
1.6
1.4
China
3.5
4.3
4.6
3.9
4.0
3.7
3.7
3.6
4.1
3.9
6.6
5.2
5.1
Hong Kong
4.5
0.50 ( 12/2008)
6.4
5.1
5.0
6.0
5.6
6.2
5.7
5.2
3.7
2.4
1.8
0.0
India
5.0
7.75 ( 01/2015)
Country
Indonesia
8.4
8.2
7.8
7.3
7.3
7.3
6.7
4.5
4.0
4.5
4.8
6.2
3.5 – 5.5
Japan
1.6
1.4
1.5
1.6
3.4
3.7
3.6
3.4
3.3
3.3
2.9
2.4
2.0
Korea
1.1
1.1
1.0
1.3
1.5
1.7
1.7
1.6
1.4
1.2
1.2
1.0
2.5 – 3.5
2.00 (
10/2014)
Malaysia
3.2
3.4
3.5
3.5
3.4
3.2
3.3
3.2
3.3
2.6
2.8
3.0
2.0 – 3.0
3.25 (
07/2014)
Philippines
4.1
4.2
4.1
3.9
4.1
4.5
4.4
4.9
4.9
4.4
4.3
3.7
3.0 – 5.0
4.00 (
09/2014)
Singapore
1.5
1.4
0.4
1.2
2.5
2.7
1.8
1.2
0.9
0.6
0.1
-0.3
2.0 – 3.0
0.12 (N/A)**
Taiwan
0.3
0.8
-0.1
1.6
1.7
1.6
1.6
1.8
2.1
0.7
1.1
0.9
1.2
Thailand
1.7
1.9
2.0
2.1
2.5
2.6
2.4
2.2
2.1
1.8
1.5
1.3
0.5 – 3.0
Germany
1.4
1.3
1.2
1.0
1.3
0.9
1.0
0.8
0.8
0.8
0.8
0.6
2.0
US
1.5
1.6
1.1
1.5
2.0
2.1
2.1
2.0
1.7
1.7
1.7
1.3
2.0
7.75 ( 11/2014)
0-0.10 ( 10/2010)
1.875 ( 06/2011)
2.00 (
03/2014)
0.05 ( 09/2014)*
0-0.25 ( 12/2008)
All data shown above are headline CPI inflation unless otherwise stated. India: Data for India is Wholesale Price Index. Thailand’s central bank targets core CPI, which excludes raw food and energy.
*The arrows and dates in the Central Bank Policy Rate column indicate the direction and date of last change, respectively. The central bank’s policy rate for each country includes the one-year benchmark lending rate (China),
official base rate adjusted in accordance to the Hong Kong dollar’s demand or supply (Hong Kong), RBI policy repo rate (India), BI benchmark policy rate (Indonesia), BoJ uncollateralised overnight call rate (Japan), BoK base rate
(Korea), overnight policy rate (Malaysia), reverse repurchase (RRP) rate (Philippines), discount rate (Taiwan), 1-day repurchase rate (Thailand), ECB main refinancing operations rate (Germany) and Federal funds rate (U.S.).
**The Monetary Authority of Singapore does not set monetary policy by targeting a short-term interest rate. Instead, it manages the Singapore dollar exchange rate against a trade-weighted basket of currencies of the country’s
major trading partners and competitors.
Source: J.P. Morgan Asset Management, 19 Jan 2015
26
MSCI Asia ex Japan 12m forward valuations
Valuations are attractive, assuming an earnings recovery
Latest PE value as of (31 Dec 2014): 11.5x
Latest PB value as of (31 Dec 2014): 1.4x
x
x
18
3.0
16
2.5
+1sd 13.6
14
+1sd 1.9
2.0
Avg 12.0
12
Avg 1.6
11.5
1.5
10
1.4
-1sd 10.5
-1sd 1.4
1.0
8
0.5
6
04
05
06
07
08
09
10
11
12
13
14
04
05
06
07
08
09
10
Source: Thomson Reuters Datastream, 31 Dec 2014
Source: Thomson Reuters Datastream, 31 Dec 2014
PE = Price to Earnings Ratio
PB = Price to Book Ratio
Indices do not include fees or operating expenses and are not available for actual investment. Past performance is not indicative of future performance
27
11
12
13
14
Appendices
28
China: Credit conditions
RMB Reference and Closing Rate
USD/RMB
6.5
Ceiling of Daily
Trading
PBoC Reference Rate
Closing Rate
6.4
6.3
6.2
Floor of
Daily Trading
6.1
6.0
'12
'13
Source: People’s Bank of China, National Bureau of Statistics of China, CEIC, FactSet
Source: J.P. Morgan Asset Management "Guide to the Markets - Asia", 1Q 2015 Page 11
29
'14
India inflation and repo rate
Wholesale Prices - all items, nsa
14%
Reserve Bank of India Repo Rate
Consumer Price Index YoY % Change
12%
10%
8%
6%
4%
2%
0%
-2%
'07
Source: J.P. Morgan Asset Management, 19 Jan 2015
NSA is not seasonally adjusted
30
'09
'11
'13
'15
Portfolio characteristics at 31 December 2014
Portfolio
Benchmark*
Portfolio
Benchmark*
Dividend Yield
1.8
2.5
Market Capitalisation (US$m)
42,306.7
41,330.3
Price / Earnings
13.1
12.9
Hist. 3yr Sales Growth
16.4
13.3
P/E using FY1 Estimates
13.4
12.6
Hist. 3yr EPS Growth
15.5
9.7
Price / Cash Earnings
9.2
8.1
Est. 3-5 Yr EPS Growth
16.7
12.4
Price / Book
1.8
1.5
Return of Assets
9.9
8.7
Price / Sales
1.4
1.1
Return of Equity
17.4
15.8
Operating Margin
20.6
20.4
Predicted Tracking Error
3.28
Net Margin
17.5
18.2
Predicted Beta
1.03
LT Debt / Capital
25.8
22.8
Source: J.P. Morgan Asset Management / MSCI & FactSet, as at 31 Dec 2014
The above portfolio characteristics are shown for illustrative purposes only and are subject to change without notice.
31
Portfolio characteristics
Active Share (%)
Number of Holdings
Sep 14
Oct 14
Nov 14
Dec 14
Sep 14
Oct 14
Nov 14
Dec 14
73.4
70.3
71.5
72.7
84
74
71
68
Tracking Error (%)
Turnover (%)
Sep 14
Oct 14
Nov 14
Dec 14
Sep 14
Oct 14
Nov 14
Dec 14
6.5
7.8
6.8
5.1
2.75
2.73
2.93
3.28
Note: October turnover only represents the turnover of the portfolio within the month
Source: Axioma, J.P. Morgan Asset Management
32
Country weightings
As of 30 September 2014




Greater China – fund remains overweight China and underweight Taiwan and China
Korea – fund remains overweight – with a focus on names exposed to global recovery and domestic housing
improvement.
ASEAN – we are underweight the ASEAN markets, with the exception of Thailand where we are overweight and
Indonesia where we are marginally overweight.
India – fund exposure has increased substantially since last year, partly due to positive political and economic
outlook and partly due to stock performance
Country weightings
As of 30/9/2013
As of 30/9/2014
28.6 29.5
24.7
21.0 22.6 19.3
15.4
13.4 14.0
16.6
13.8
9.1
7.6
10.0
12.2
5.9 5.4
3.0
1.1
3.7 3.4
3.9 3.3
6.3
5.0
0.0 1.1 1.6
1.6 1.0
0.3
0.0
-4.3
China
Korea
Taiwan
India
Hong Kong
Thailand
Indonesia
Singapore
Philippines
Malaysia
Cash
33
Sector weightings
As of 30 September 2014

We are overweight financials and information technology.

We are overweight consumer discretionary sector and underweight the consumer staples

We are overweight Materials, neutral Energy and underweight Utilities and Telecom Services.
Sector weightings
As of 30/9/2013
As of 30/9/2014
37.8
34.9
31.7
24.1
23.6
18.0
22.1
21.1
17.4
13.712.8
10.9
4.9 6.1 5.2
9.3
5.2 6.5
1.0
Banks
Insurance
Real Estate
Financials
2.9 2.6
7.6 7.8
5.3
7.9
8.6
5.9 5.8
5.4 4.7
5.5
3.3 4.5
6.7
3.0 2.7 4.1
0.0
2.6 1.9
1.8 1.5
0.3
Diversified
Financials
-4.3
Financials
Information Consumer
Technology Discretionary
Materials
Energy
Industrials
Consumer
Staples
Utilities
Health Care
Telecom
Services
34
0.0
Cash
JPMorgan Asian Investment Trust – Top 10 holdings
% Fund
30/9/13
% Fund
30/9/14
B’mark*
30/9/14
Active
6.6
5.1
4.6
0.5
Taiwan
4.0
4.7
3.2
1.5
3 Tencent Holdings
China
3.6
3.8
2.5
1.4
4 KB Financial Group
Korea
Financials
2.7
3.3
0.5
2.8
5 AIA Group
Hong Kong
Financials
3.3
3.0
2.0
1.0
6 HDFC Bank
India
Financials
1.4
2.9
0.2
2.7
7 POSCO
Korea
Materials
3.4
2.5
0.7
1.8
8 DBS Group Holdings
Singapore
Financials
1.7
2.2
0.8
1.4
9 Tata Motors
India
1.2
2.1
0.2
1.9
10 KIA Motors
Korea
0.6
2.0
0.4
1.6
28.5
31.6
15.1
16.6
Stock Name
Country
Sector
1 Samsung Electronics
Korea
2 Taiwan Semiconductor Manufacturing
Number of Stocks: Portfolio: 84
Benchmark: 595
Top 20 Holdings
48.0
Top 30 Holdings
60.5
The companies/securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell.
The holdings represent the current holdings of the fund. However, it cannot be assumed that these types of investments will be available to or will be selected by the fund in the future.
35
Portfolio characteristics at 30 September 2014
Portfolio
Benchmark*
Portfolio
Benchmark*
Dividend Yield
1.9
2.5
Market Capitalisation (US$m)
36,202.6
38,640.9
Price / Earnings
12.9
12.5
Hist. 3yr Sales Growth
16.6
13.2
P/E using FY1 Estimates
12.5
11.9
Hist. 3yr EPS Growth
18.9
8.4
Price / Cash Earnings
8.7
8.0
Est. 3-5 Yr EPS Growth
15.8
12.6
Price / Book
1.7
1.5
Return of Assets
9.8
8.5
Price / Sales
1.1
1.1
Return of Equity
17.8
15.7
Operating Margin
19.7
20.0
Predicted Tracking Error
2.75
Net Margin
16.8
17.8
Predicted Beta
1.09
LT Debt / Capital
26.2
22.7
Source: J.P. Morgan Asset Management / MSCI & FactSet, as at 30 Sep 2014
The above portfolio characteristics are shown for illustrative purposes only and are subject to change without notice.
36
Asia-Pacific Performance
Mkt Cap
Yield (%)
PBV (x)
USD bn
2014
2015
2016
2014
2015
2016
2015
2015
2014
2015
2016
1M
3M
YTD
MSCI Asia Pacific Index
MSCI Asia Pacific ex Japan
Index
MSCI Asia Index
6,704
14.1
13.0
11.8
12.1
9.1
9.8
2.8
1.4
10.5
10.7
10.9
-2.0
-1.7
-2.5
4,063
13.2
12.2
11.1
8.3
7.9
9.8
3.4
1.5
11.9
12.0
12.2
-2.3
-1.2
-0.2
5,750
14.0
12.7
11.5
13.4
10.0
10.1
2.5
1.3
10.3
10.5
10.7
-1.9
-1.3
-1.6
MSCI Asia ex Japan Index
3,109
12.7
11.6
10.5
9.4
9.1
10.3
2.9
1.4
11.7
11.8
11.9
-2.3
-0.2
2.2
Australia
934
14.9
14.5
13.4
4.4
3.2
7.9
5.0
1.9
12.5
12.8
13.2
-2.5
-4.5
-7.5
China
831
10.1
9.4
8.4
7.9
8.0
11.3
3.4
1.3
14.1
13.7
13.8
1.1
7.1
4.7
Hong Kong
388
13.2
14.5
12.7
24.1
-8.9
9.2
3.2
1.2
9.6
8.3
8.2
-4.2
2.7
2.0
India
272
18.9
16.4
14.1
11.0
15.4
16.4
1.6
2.6
15.3
15.8
16.3
-6.0
-0.8
21.9
24.1
31 Dec 2014
Indonesia
P/E (X)
EPS Growth (%)
ROE (%)
USD Performance
105
16.4
14.8
13.0
8.3
10.5
14.0
2.7
2.9
20.2
19.6
19.6
-0.5
0.4
Japan
2,641
15.9
14.3
13.0
20.1
11.4
9.8
2.0
1.3
8.7
9.0
9.3
-1.5
-2.5
-5.7
Korea
559
11.6
9.5
8.8
-0.6
21.5
7.9
1.5
0.9
8.8
9.8
9.7
-3.2
-8.7
-12.6
Malaysia
137
16.3
15.0
13.8
-3.2
8.7
9.0
3.3
1.8
11.7
12.0
12.2
-6.6
-11.1
-13.4
New Zealand
20
20.3
19.0
17.6
5.7
6.8
8.0
4.8
1.9
10.3
9.9
10.5
3.0
2.1
2.6
Philippines
49
21.3
18.9
16.9
6.1
12.7
12.1
2.3
2.8
14.5
14.9
15.2
0.0
0.6
23.7
Singapore
195
14.5
13.6
12.3
6.7
7.1
10.1
3.7
1.3
9.5
9.6
10.1
-0.9
-1.0
-0.6
Taiwan
481
14.2
13.2
12.3
23.7
7.4
8.3
3.5
1.7
13.2
13.1
13.2
-2.2
1.7
6.9
Thailand
92
14.8
13.1
11.5
5.5
12.4
14.3
3.4
1.9
14.2
14.6
15.3
-7.2
-6.4
13.3
MSCI AC World Index
36,893
16.1
14.9
13.3
6.2
8.3
11.7
2.6
1.9
12.7
12.8
13.3
-2.0
0.1
2.1
MSCI Europe Index
MSCI EM (Emerging Markets)
Index
MSCI United States Index
8,203
15.2
14.0
12.6
2.8
8.9
11.6
3.8
1.6
11.3
11.7
12.3
-4.3
-4.6
-8.6
652
9.6
9.2
8.2
-7.6
4.8
11.6
4.2
1.0
11.7
11.3
11.5
-10.1
-10.6
-17.6
19,315
18.0
16.7
14.8
6.6
8.0
12.3
2.0
2.5
15.2
15.1
15.7
-0.5
4.3
11.1
Note: The above data are compiled based on the MSCI AC Asia Pacific universe of stocks with which IBES forecasts are available. Fiscal year of each company is calendarized to December as the
year-end. The market capitalization for countries, sectors and the region are free-float adjusted.
Source: IBES Consensus, MSCI, FactSet. As at 31 Dec 2014. AC is All Countries
37
Monitoring the Trend in Country EPS Forecasts (2014 and 2015)
Asia Pacific ex-Japan
115
110
105
100
95
90
85
80
Feb 13
Australia
2015
105
100
2014
100
2014
Jan 14
Jul 14
Dec 14
95
Feb 13
Aug 13
Jan 14
Jul 14
Dec 14
Taiwan
2015
120
120
110
Jan 14
Jul 14
Dec 14
Indonesia
95
Feb 13
Aug 13
Jan 14
Jul 14
Dec 14
60
Feb 13
2014
Aug 13
Jul 14
Dec 14
115
110
105
100
95
90
85
80
75
70
Feb 13
120
105
130
115
2015
120
2014
90
90
Jan 14
85
Feb 13
80
Feb 13
Aug 13
Jan 14
Jul 14
Dec 14
Jan 14
Jul 14
2015
2014
Aug 13
Jan 14
Jul 14
Dec 14
Jul 14
Dec 14
2015
105
2014
Aug 13
Jan 14
2014
100
Jul 14
Dec 14
95
Feb 13
Aug 13
Jan 14
Source: I/B/E/S, as at 31 Dec 2014
Notes: All year ends are for December except Australia which is for June. EPS figures are normalized, starting at 100 on base date Feb 2013 for ease of comparison.
These numbers are directly from IBES aggregate and may differ from those in the growth expectations pages where changes are made for exceptional items. This dashboard aims to show
changes in earnings expectations. Countries' earnings revisions are in local currency whereas APxJ regions' earnings revisions are in US$.
38
Dec 14
110
2015
100
2014
Aug 13
Philippines
140
110
Dec 14
Jan 14
India
100
Jul 14
95
Feb 13
110
95
Aug 13
2015
70
Malaysia
2015
Dec 14
Thailand
80
2014
100
Aug 13
Jul 14
90
105
95
Jan 14
100
2015
110
100
Aug 13
Korea
125
115
2014
90
Feb 13
2014
100
95
Aug 13
2015
110
2015
105
2014
110
120
115
110
105
100
95
90
85
Feb 13
115
110
105
115
90
Feb 13
Hong Kong
115
2015
China
105
Singapore
110
Monitoring the Trend in Sector EPS Forecasts (2014 and 2015)
Asia Pacific ex-Japan
115
110
105
100
95
90
85
80
Feb 13
2015
2014
Aug 13
Jan 14
Jul 14
Dec 14
Financials
Consumer Staples
110
2015
105
100
2014
95
Aug 13
Jan 14
Jul 14
Dec 14
120
115
110
105
100
95
90
85
Feb 13
Materials
Telecom
115
110
105
100
95
90
85
80
75
70
65
Feb 13
105
2015
110
2014
90
90
Aug 13
Jan 14
Jul 14
Dec 14
Jul 14
Dec 14
75
Feb 13
Aug 13
Jan 14
Jul 14
Dec 14
105
2015
2015
95
2014
85
75
2014
65
Aug 13
Jan 14
Jul 14
Dec 14
55
Feb 13
105
100
95
90
85
80
75
70
65
Feb 13
2015
2014
Aug 13
Jan 14
Jul 14
Aug 13
Jan 14
Jul 14
Dec 14
120
115
110
105
100
95
90
85
80
Feb 13
2015
2014
Aug 13
Jan 14
Jul 14
Utilities
110
2015
105
2015
2014
100
2014
95
Aug 13
Jan 14
Jul 14
Dec 14
90
Feb 13
Aug 13
Jan 14
Jul 14
Dec 14
Source: I/B/E/S, as at 31 Dec 2014
Notes: All year ends are for December. EPS figures are normalized, starting at 100 on base date Feb 2013 for ease of comparison.
These numbers are directly from IBES aggregate and may differ from those in the growth expectations pages where changes are made for exceptional items. This dashboard aims to show
changes in earnings expectations. Sectors’ earnings revisions are in local currency whereas APxJ regions' earnings revisions are in US$.
39
Dec 14
115
80
Jan 14
70
Feb 13
Industrials
85
Aug 13
2014
80
95
2014
2015
100
100
2015
Energy
120
Health Care
115
90
Feb 13
115
110
105
100
95
90
85
80
75
Feb 13
Dec 14
Pacific Regional Group
CIO, Asia Pacific
Ted Pulling
Pacific &
Regional
India
Australia
ASEAN
Hong Kong
Rukhshad Shroff
Raj Nair
Hong Kong
James Ewinger^
Tim Wood
Singapore
Pauline Ng
Sarinee Sernsukskul
Chang-qi Ong
Stacey Neo
Isaac Thong
India
Harshad Patwardhan
Amit Gadgil
Karan Sikka
Praveen Kotian
Hong Kong
Ted Pulling
Jeffrey Roskell
Victor Lee
Aisa Ogoshi^
James Ewinger^
Joanna Kwok
Sonia Yu
Marc Franklin
Julie Ho
Ruben Lienhard
David Hanbury
Japan
Greater China
Korea
Tokyo
Shoichi Mizusawa
Daisuke Nakayama
Koji Namiki
Miyako Urabe
Eiji Saito
Nicholas Weindling
Oliver Cox
Naohiro Ozawa
Hong Kong
Howard Wang
Emerson Yip
Lilian Leung
Song Shen
Shumin Huang
Hong Kong
David Choi
John Cho
Singapore
Michael Koh
Desmond Loh
Japan
Goro Fukami
Michiko Sakai
Central
Dealing
Portfolio
Analysis
Client Portfolio Management
Hong Kong
Hong Kong
London
Hong Kong
Lee Bray
Clement Lui
Sherene Ban
Dennis Eldridge
Yasuko Sato
Erina Jindai
Pinakin Patel
Constance Wong
Janet Tsang
Julian Wong
Japan
Hong Kong
Robert Lloyd
Aisa Ogoshi^
Chief Operating
Officer
Taiwan
Behavioural
Finance
Hong Kong
Mark Davids
Geoff Hoare
Alice Wong
Korea
Jacob Kim
Alex Lee
Joseph Kwon
Japan
Oliver Cox
William Tong
Andy Kung
James Yeh
Pedro Tai
Renee Lin
Vincent Yen
Wanchen Chang
Connie Shen
Penny Tu
Neil Sun
Vincent Yu
Bonny Weng
Yvonne Lee
Hong Kong
Shanghai
Christopher Spelman CIFM JV - 16 Equity PMs
- 30 Analysts
Junko Kitamura
^ Country specialists who also manage regional portfolios
[HK Compliance Approved – 23/7/2014. Last Updated – 28/10/2014]
Source: J.P. Morgan Asset Management. As at 30 Sep 2014
There can be no assurances that the professionals currently employed by J.P. Morgan Asset Management will continue to be employed by J.P. Morgan Asset
Management or that the past performance or success of any such professional serves as an indicator of such professional’s future performance or success.
40
This is a promotional document and as such the views contained herein are not to be taken as an advice or recommendation to buy or sell any investment or
interest thereto. Reliance upon information in this material is at the sole discretion of the reader. Any research in this document has been obtained and may have
been acted upon by J.P. Morgan Asset Management for its own purpose. The results of such research are being made available as additional information and do
not necessarily reflect the views of J.P. Morgan Asset Management. Any forecasts, figures, opinions, statements of financial market trends or investment
techniques and strategies expressed are unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered to be
reliable at the time of writing, may not necessarily be all-inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or
notification to you.
It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and
investors may not get back the full amount invested. Changes in exchange rates may have an adverse effect on the value, price or income of the product(s) or
underlying overseas investments. Both past performance and yield may not be a reliable guide to future performance. There is no guarantee that any forecast made
will come to pass. Furthermore, whilst it is the intention to achieve the investment objective of the investment product(s), there can be no assurance that those
objectives will be met.
J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co and its affiliates worldwide. You should note that
if you contact J.P. Morgan Asset Management by telephone those lines may be recorded and monitored for legal, security and training purposes. You should also
take note that information and data from communications with you will be collected, stored and processed by J.P. Morgan Asset Management in accordance with
the EMEA Privacy Policy which can be accessed through the following website http://www.jpmorgan.com/pages/privacy.
Investment is subject to documentation which is comprised of the Investment Trust Profiles and Key Features and Terms and Conditions, copies of which can be
obtained free of charge from JPMorgan Asset Management Marketing Limited. Issued by JPMorgan Asset Management Marketing Limited which is authorised and
regulated in the UK by the Financial Conduct Authority. Registered in England No: 288553. Registered address: 25 Bank St, Canary Wharf, London E14 5JP.
Compliance approval number: 4d03c02a8001f15d .
41

JPMorgan Asian Investment Trust plc Investment Manager

Transcription

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