Transcript XYZ Client - Department for Social Development

Northern Ireland Central
Investment Fund for Charities
Mike Connor
June Jessop
27 February 2013
Newton at a glance
• Distinctive: Global thematic investment approach
• Access: Institutional level process
• Transparent: Clear and simple charging
£49.6bn
• Flexible: Bespoke service aiming to deliver a
positive experience to clients
All other figures Newton as at 31 December 2012
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Investment management is our only business
Idea generation
Themes efficiently focus our research
• Themes are our interpretation
of key forces that drive
change
• Themes provide a stimulus for
debate at the widest level
• Themes continually evolve
prompting a stream of new
ideas
• Themes are as much about
identifying opportunities as
managing risks
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NICIF Investment objectives and benchmark
Investment Objective
The primary objective is to achieve an annual income return of 20% more than the benchmark yield and thereafter long term
capital growth in real terms
Investment Restrictions
No tobacco
Benchmark
FTSE Govt All-Stocks (£)
25%
15 - 35%
FTSE All-Share (£)
50%
35 - 65%
FTSE W World ex UK (£)
20%
15 - 35%
5%
0 - 10%
Cash
Income
To achieve an annual income return of 20% more than the benchmark yield
Risk Profile
Medium
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NICIF Investment guidelines and portfolio structure
Portfolio Value
£27,880,560
Estimated Yield
3.8%
Cash
4%
Overseas Equities
27%
UK Equities
47%
Source: Newton, as at 31 January 2013
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Bonds
22%
Long term performance
Value as at 31 January 2013
(£)
NICIF
27,880,560
Estimated Income (%)
3.8
2012
(%)
Annualised since
inception* (%)
Performance
10.7
7.8
Benchmark
9.3
7.8
FTSE All Share Index
12.3
8.2
FTSE 350 High Yield Index
8.2
6.4
FT World Index (ex UK) (£)
12.0
8.6
FTA Government All Stocks Index
2.7
6.1
* 30 September 2004
Source: Newton & Datastream
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The impact of inflation
120
100
£
80
60
40
20
0
0
2
4
6
8
10
12
14
16
18
20
22
24
Years
Real capital value of £100 under 2% per annum erosion of purchasing power
Assuming 5% per annum erosion of purchasing power
Source: Newton
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26
28
30
Where is the income?
Interest rates likely to remain low
Cash
10 year UK gilt
0.5
No capital growth and low yield (by historic standards)
2.6
Potential for capital and income growth
UK equities - All Share
FTSE All-World ex-UK
3.5
2.6
Potential for capital and income growth
% yield
Source: Bloomberg, 22 February 2013
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Dividends provide consistency
World equity returns (inflation adjusted), split between income and capital
Source: Newton, Global Financial Data as at 30 June 2012
Past performance is not a guide to future performance. The value of investments and the income from them is not guaranteed and can fall as well as rise due to stock and currency movements.
When you sell your investment you may get back less than you originally invested
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High yielding stocks are becoming more globally diversified
Geographical split of the number of FTSE World index stocks yielding greater than 3%
1995
2012
Current yields are not indicative of future yields
Source: FACTSET, Datastream, January 2013
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High yielding stocks are becoming more globally diversified
Identify long term trends
Demand from ageing populations
5,000
4,500
4,000
Healthcare spend ($)
3,500
3,000
2,500
2,000
1,500
1,000
500
0
<25
25-34
35-44
45-54
55-64
65-74
Age (yrs)
US spend on healthcare per person
Source: US government data, 2011
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75>
Diabetes – an escalating problem
Adults with diabetes worldwide (1)
350m
% patients not achieving glycemic control target values in
the US and EU (2)
>50%
Patients remaining undiagnosed in BRIC countries (3)
~ 2/3
Expected compound annual growth rate of global diabetes
market between 2011 and 2015 (4)
4-7%
Expected size of global diabetes market in 2015 (4)
$43-48bn
Source: Sanofi
(1) G Danaei, Lancet 2011
(2) Adelphi Disease Specific Program (DSP) III and VII (sample of over 10,000 diabetic patient records)
(3) Sanofi’s estimates based on multiple sources
(4) The Global Use of Medicines: Outlook through 2015, IMS Institute for Healthcare Informatics, May 2011
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Using technology in medicine
Source: Sanofi
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Sanofi share price
Source: Bloomberg
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Sanofi dividend history
Net dividend (in euros)
Source: Sanofi
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Example of Fund holdings - pharmaceuticals
AstraZeneca
5.8%
GlaxoSmithKline
5.2%
Johnson & Johnson
3.2%
Novartis
3.6%
Roche
3.3%
Sanofi
3.6%
Source: Newton, January 2013
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Daily brands
Source: Unilever
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(Daily?!) Treats
Source : Unilever
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Unilever share price
Source: Bloomberg
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Unilever dividend history
Dividend has grown by 8% p.a., on average, since 1979
Source: Unilever
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Important information
Past performance is not a guide to future returns. The value of investments and the income from them can fall as well as rise and investors may not get back the original amount
invested. The value of overseas securities will be influenced by fluctuations in exchange rates. If part of the portfolio is invested in sub-investment grade bonds, which typically
have a low credit rating and carry a high degree of default risk, then please be aware that this can affect the capital value of your investment. If the portfolio has exposure to
hedge funds, gold, private equity and property via publicly quoted transferable securities, then there are additional risks associated with these sectors. The information contained
within this document should not be construed as a recommendation to buy or sell a security. It should not be assumed that a security has been - or will be - profitable. There is
no assurance that a security will remain in the portfolio.
The opinions expressed in this presentation are those of Newton Investment Management and should not be construed as investment advice. In addition the information
contained in this presentation should not be construed as a recommendation to buy or sell a security.
Newton Investment Management Limited
BNY Mellon Fund Managers Limited
BNY Mellon Centre
160 Queen Victoria Street
London EC4V 4LA
Tel: 020 7163 9000
BNY Mellon Centre
160 Queen Victoria Street
London EC4V 4LA
Tel: 020 7163 9000
Registered in England No. 1371973.
www.newton.co.uk
Registered in England No. 1998251
Registered office: as above.
Both firms are authorised and regulated by the FSA, are members of the IMA and are Bank of New York Mellon Companies SM
Also at
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Capital House
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Edinburgh EH3 9SU
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Leeds
West Yorkshire LS1 4BN