ING (L) Invest
Asia Pacific High Dividend
Asia ex Japan Equity Team
ING Investment Management Asia Pacific
September 2007
Introduction
Fund Objective
The Asia Pacific High Dividend Fund seeks to provide investors with high
dividend income yield as well as long term capital appreciation by investing
in a diversified portfolio of equities listed in the Asia Pacific region.
Key Benefits to Investors
1) Income returns from a high dividend yield portfolio
2) Capital returns from stock selection within a high dividend Asia Pacific
stock universe
3) Risk control and portfolio positioning to ensure strategic diversification
4) Attractive return / risk profile in bull and bear cycles
5) Strong team and investment process in the management of the fund
ING Asia Pacific High Dividend – September 2007 2
Framing the Key Issues
ING Asia Pacific
The investor desires… High Dividend
Exposure to the attractive return
1
opportunities offered by Asia Pacific
equities
A steady and stable current income
2 stream
An experienced management team with
a proven track record and strong
3 regional presence in Asia Pacific
ING Asia Pacific High Dividend – September 2007 3
ING IM a Pioneer in High Dividend investing...
• Global High Dividend > AUM: EUR 4.9bn
• Euro + Europe High Dividend > AUM: EUR 4.6bn
• US High Dividend > AUM: EUR 186m
Data as of 30 June 2007
The same high dividend philosophy and process was tested, customised
and implemented for Asia Pacific...
ING Asia Pacific High Dividend – September 2007 4
ING Asia Pacific High Dividend funds
ING Asia Pacific High Dividend (Cayman registered) ING Asia Pacific High Dividend (Taiwan registered)
Bloomberg: INGAPHD KY Equity Bloomberg: INGAPHD TT Equity
Inception: 9 May 2006
Inception: 31 Oct 2005
AUM: USD$457.4m
AUM: USD$28.5m
Portfolio Approximately 75 to 110 stocks
construction: Equal weighted approach
ING Asia Pacific High Dividend Equity Income Fund (USA)
No specific tracking error limits.
Avoidance of concentration of risks which Bloomberg: XIAEX US Equity
Risk Controls: ensure that country and sector exposures
are within 10% active weight limits relative Inception: 28 March 2007
to MSCI AC Asia Pacific ex Japan.
AUM: USD$321.8m
Data as of 31 July 2007
ING Asia Pacific High Dividend – September 2007 5
ING Asia Pacific High Dividend Performance
YTD
1m 2m 3m 6m 12m 2007
ING Asia Pacific High
Dividend (Cayman) gross
total return in USD -3.0% +0.4% +3.3% +19.6% +44.5% +22.5%
MSCI AC Asia Pacific ex
Japan total return in USD -1.6% +2.9% +7.3% +21.3% +43.6% +21.5%
Excess Return -1.4% -2.5% -4.0% -1.7% +0.9% +1.0%
Data as of 31 August 2007. Total return figures for the fund include quarterly dividends distributed. The Cayman registered fund has
paid out USD$0.12 quarterly dividends, or USD$0.48 per year. The inception of the fund was USD$10.00.
The fund has not been rated by an external agency. However, our own internal comparisons with similar competitors reveal that we
rank close to the top.
ING Asia Pacific High Dividend – September 2007 6
Why Asia Pacific Equities?
• Asia Pacific ex Japan accounts for about 8% to 9% of the MSCI World
equity index (and Asia Pacific accounts for about 18% of the MSCI
World equity index)
• Macroeconomic growth in this region is strong and we expect it to
remain high and well supported for the long term
• Corporate earnings growth is attractive
• Asian corporates in good shape
• Valuations, dividend yields and dividend growth are attractive
ING Asia Pacific High Dividend – September 2007 7
The Case for High Dividend Yield Strategy
1) Compound interest of dividends
ING Asia Pacific High Dividend – September 2007 8
The Case for High Dividend Yield Strategy
2) Dividend yield strategy as a medium to long term alpha source
We back-tested 15,000+ portfolio
simulations and 30 factors for the
Asia Pacific stock universe, over
different bear & bull cycle scenarios,
and found the following:
a)Dividend Yield as a medium
to long term alpha source
Over a 7 year period from Dec 1997,
our backtested Asia Pacific high
dividend portfolio achieved +350%
absolute return (versus a +85%
return for the benchmark).
b)Dividend Yield combined with
other stock selection factors
Additional returns of +5% to +15%
per annum can be achieved when
dividend yields are combined with
other stock selection factors.
ING Asia Pacific High Dividend – September 2007 9
The Case for High Dividend Yield Strategy
3) Return / Risk profiles in various market cycles
Full Backtested Period 31 Dec 1997 to 31 Mar 2005 31 Dec 1997 to Mid 1998: last 6 months of Asian financial crisis
covering various bull & bear cycles Mid 1998 to 31 Dec 1999: strong technology rally
APHD = Asia Pacific High Dividend simulated portfolio. Returns are after transaction costs.
All other indices are actual index returns.
ING Asia Pacific High Dividend – September 2007 10
The Case for High Dividend Yield Strategy
3) Return / Risk profiles in various market cycles
31 Dec 1999 to 31 Sep 2001 : full bear cycle from tech crash to 30 Sep 2001 to 31 Mar 2005 : Post Sep 2001, Iraq war, and post
Sep 2001 terrorist effects war rally from mid 2003 onwards
APHD = Asia Pacific High Dividend simulated portfolio. Returns are after transaction costs.
All other indices are actual index returns.
ING Asia Pacific High Dividend – September 2007 11
Universe of Asia Pacific Equities
The Asia Pacific High Dividend fund
can invest in the following countries:
• Australia
• China
• Hong Kong
• India
• Indonesia
• Japan
• Malaysia
• New Zealand
• Philippines
• Singapore
• South Korea
• Taiwan
• Thailand
• There are over 25,000 listed equities in
these markets.
The Asia Pacific ex Japan
region accounts for approx • The fund will hold between 75 to 110
8% to 9% of MSCI AC World
equities.
ING Asia Pacific High Dividend – September 2007 12
Investment Process Overview
Total Asia Pacific Universe
25,000 stocks
Screen:
Daily Liquidity and Market Cap Liquidity (USD$2m Daily)
3,000 stocks Market Cap (USD$100m)
Dividend Yield Dividend Yield Filter >2.5%
500 stocks
Stock Selection Quantitative Ranking
100-120 stocks Bottom-up fundamental analysis
Equity Portfolio Risk diversification and portfolio positioning
75-110 stocks Country and sector limits +/- 10% of benchmark
ING Asia Pacific High Dividend – September 2007 13
Security Selection
Quantitative Analysis Qualitative Analysis
• ING’s quantitative evaluation is based • Review of stocks screened in the model
on factors which identify attractive portfolio using our fundamental research
stocks from within the high dividend platform to ensure we have confidence in
yield universe. the future growth of the selected
companies and their ability to pay
sustainable dividends.
• Over 30 factors are tested. Factors and
filters considered for the model include
not only dividend yield but also earnings • Multi-dimensional analysis to capture
yield, earnings growth, analyst impact of fundamental trends on
sentiment, altman score, and qualitative countries and companies, including inputs
scoring inputs from our local Asia from local ING IM analysts in Asia Pacific.
Pacific offices.
• Internal bottom up company evaluation
• Poorly ranked stocks are not owned. • Business Outlook
• Valuations and Multiples
• The specific factors and weightings • Financial Performance
used in the model are continually • Management Quality
reviewed and evaluated.
ING Asia Pacific High Dividend – September 2007 14
Portfolio Characteristics
As of 31 August 2007
ING Asia Pacific
MSCI AC Asia
High Dividend
Pacific ex Japan
Fund (Cayman)
Historical Dividend Yield (FY0), after taxes 4.5 % 2.4 %
12 month Forward Dividend Yield, after taxes * 5.0 % 2.9 %
12 month Forward Price to Earnings ratio * 11.9 15.9
Price to Book ratio 2.3 2.7
Price to Sales ratio 1.2 1.9
Return on Equity 27.9 % 20.4 %
Historical Earnings Growth 16.3 % 24.1 %
Forward Earnings Growth FY1/FY0 11.7 % 19.4 %
Forward Earnings Growth FY2/FY1 10.4 % 15.5 %
Volatility (since inception of fund in Oct 2005) 10.9 % 11.8 % **
Tracking error (last 12 months relative to benchmark) 3.6 % -
Beta relative to benchmark (as of 30 March 2007) 0.90 1.00
* 12 month forward, time weighted, calculations as of 31 August 2007
** The 12% volatility of the MSCI AC Asia Pacific ex Japan USD benchmark is approximately due to 10% volatility in stock prices plus
2% volatility due to currencies.
ING Asia Pacific High Dividend – September 2007 15
Country & Sector Weights
As of 31 August 2007
Country Weighting (%) Sector Weighting (%)
COUNTRY Portfolio Benchmark SECTOR Portfolio Benchmark
Australia 25.7 27.0 Consumer
10.3 3.4
China 9.3 15.9 Discretionary
Hong Kong 11.8 12.9 Consumer Staples 5.2 5.9
India 2.1 6.1 Energy 6.2 8.6
Indonesia 1.2 1.2
Financials 31.8 37.7
Japan 0.0 0.0
Malaysia 6.4 0.0 Healthcare 0.0 1.2
New Zealand 2.2 0.0 Industrials 11.1 9.4
Pakistan 0.0 0.0 Information
10.5 12.5
Philippines 2.8 0.0 Technology
Singapore 6.5 6.2 Materials 9.7 9.3
South Korea 15.4 16.7 Telecommunication
12.8 8.7
Taiwan 15.1 14.0 Services
Thailand 1.4 0.0 Utilities 2.4 3.2
Representative Characteristics from ING Asia Pacific High Dividend Fund (Cayman registered fund). Data as of 31 August 2007
ING Asia Pacific High Dividend – September 2007 16
Performance Characteristics
ING Asia Pacific High Dividend – September 2007 17
ING Investment Management – Asia Pacific
Unparalleled Coverage of Asian Investments Strong Presence in Asia Pacific
US$91 billion in Assets Under Management
Presence in 12 locations in the region
Seoul
The widest network and largest pool of financial
Tokyo professionals in Asia ex-Japan*. There are over
Shenzhen Taipei 230 investment professionals in ING IM in Asia
Pacific
Hong Kong
Mumbai The 3rd largest retail fund manager in Asia ex-
Bangkok Manila
Japan and Australia*
Kuala
Lumpur Singapore
Sydney
Auckland
As of 31 December 2006
* Asia Asset Management, September 2006
ING Asia Pacific High Dividend – September 2007 18
ING IM Asia Pacific Regional Equity Team
Our team members understand the Asia Pacific region – most of our investment
professionals were born in this region, and are now living and working in this region.
Nicholas Toovey
Regional Head of Equity
Asian Quantitative
Asian Equity Local Equity
Resources
Teik Cheah Local Head of Equity
Bratin Sanyal Regional Head of Quantitative
Head of Asian Equity
12 Asian Countries
Resources & Investment Risk
Australia Malaysia
China Philippines
Hong Kong Singapore
Oscar Leung Gregory Ko Barbara Chan Samuel Hui India Taiwan
Quantitative
Senior Investment Assistant Investment Data Analyst Japan Thailand
Investment Manager
Manager Manager Korea New Zealand
Michael Chiu Charlie Yang
Benjamin So Gilbert Tan
Senior Investment Investment Analyst
Manager Quantitative Analyst Quantitative Analyst
Kelly Chung
Investment Analyst
Hong Kong office Local offices
ING Asia Pacific High Dividend – September 2007 19
Key Benefits to Investors
• Exposure to Asia Pacific equities
• Exposure to a value based high dividend strategy, within a high
growth region
• Benefit from a diversified portfolio with favourable characteristics in
the areas of volatility, dividend yield, earnings yield, earnings growth,
and country & sector exposures
• Benefit from a strong investment process combining the best of
quantitative and fundamental analyses
• Access the know how & investment expertise of ING Asian Pacific
team members who were born and who live & work in this region
ING Asia Pacific High Dividend – September 2007 20
Appendix - Biographies
ING Asia Pacific High Dividend – September 2007 21
Appendix - Biographies
ING Asia Pacific High Dividend – September 2007 22
Appendix - Biographies
ING Asia Pacific High Dividend – September 2007 23
Disclaimer
The elements contained in this document have been prepared solely for the purpose of information and do not constitute an offer, in
particular a prospectus or any invitation to treat, buy or sell any security or to participate in any trading strategy. This document is intended
only for professional investors. While particular attention has been paid to the contents of this document, no guarantee, warranty or
representation, express or implied, is given to the accuracy, correctness or completeness thereof. Any information given in this document
may be subject to change or update without notice. Neither ING Investment Management (for this purpose using the legal entity ING
Investment Management Luxembourg S.A. nor any other company or unit belonging to the ING Group, nor any of its officers, directors or
employees can be held direct or indirect liable or responsible with respect to the information and/or recommendations of any kind
expressed herein. The information contained in this document cannot be understood as provision of investment services. If you wish to
obtain investment services please contact our office for advice. Use of the information contained in this document is solely at your risk. No
direct or indirect liability is held for any loss sustained or incurred by readers as a result of using this publication or basing any decisions on
it. Investment sustains risk. Please note that the value of your investment may rise or fall and also that past performance is not indicative of
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copied, reproduced, distributed or passed to any person at any time without our prior written consent. Any claims arising out of or in
connection with the terms and conditions of this disclaimer are governed by Dutch law. ING (L) Invest Asia Pacific High Dividend is a
subfund of ING (L) Invest (SICAV) established in Luxembourg. ING (L) Invest (SICAV), is duly authorised by the Commission de
Surveillance du Secteur Financier (CSSF) in Luxembourg. Both funds are registered with the CSSF.
For more detailed information about the investment fund we refer to the prospectus and the corresponding supplements. In relation to the
investment fund mentioned in this document a Financial Information Leaflet (simplified prospectus) has been published containing all
necessary information about the product, the costs and the risks which may occur. Do not take unnecessary risk. Read the Financial
Information Leaflet (simplified prospectus). Investment funds do not offer guaranteed returns and any past returns are not indicative nor do
they secure future returns. The prospectus, supplement and the Financial Information Leaflets (simplified prospectus) are available on the
following website: www.ingim.com. The information in this document is not intended to solicit sales of investments or subscription of
securities in countries where this is prohibited by the relevant authorities or legislation. Read the prospectus before investing.
ING Asia Pacific High Dividend – September 2007 24