funds by okyestao

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									                                        Autumn 2011




 Working in partnership with The PFS

   Investment principles and risk –
   “Building Successful Portfolios"
                                                1

 Agenda




   The difficulties / making changes

   What is the advisers role / limitations

   New breed – Absolute Return Funds

   Lots of choice – so where is your process

   A process / solutions



   Merlin Market view to conclude
 Suitability
                                                                    3

 What are you selling?

Financial planning is distinct from investment management


    Influence over the variables that you & your clients control

    Maximise use of tax breaks etc

    Knowledge of product suitability

    Experience across a range of markets

    Constantly evaluating clients’ financial goals

    Time




“A goal without a plan is just a wish” Antoine de Saint-Exupery
                                                     4

 Key considerations when investing clients’ money




    Attitudes to risk

    Asset allocation

    Market volatility

    Diversification

    Funds’ style biases

    Performance records

    Regulatory issues
                                                                                      5

 The suitability cycle




                                  1. Assess suitability –
                                     Client




        4. Review suitability –         Demonstrate         2. Assess suitability –
           Investment                      and                 Investment
                                         Document




                                  3. Review suitability –
                                     Client
                                                                                            6

 FSA Paper – January 2011




   Assessing suitability of Investments

    “The high number of unsuitable investment selections we see in pension and investment
                              markets is still a significant concern”

                                             50%

                   Of files assessed by FSA during an 18 month period ending
                             Sept 2010 were unsuitable on grounds of risk



                          Capacity for loss was not considered enough
                                                                                                                  7

 Understanding ‘reverse percentages’




   Concept:                                                                    rloss    rrecov   Growth factor
                                                                                -5%      5.3%         1.05
        The investment return required to recover from an investment loss       -10%    11.1%         1.11
        increases exponentially with the scale of the loss.                     -15%    17.6%         1.18
                                                                                -20%    25.0%         1.25

   Definitions:                                                                -25%    33.3%         1.33
                                                                                -30%    42.9%         1.43
    rloss =   the loss rate from a specified starting point                     -35%    53.8%         1.54
              (this is a -ve percentage)                                        -40%    66.7%         1.67

    rrecov = the growth rate required to recover to a previous starting point   -45%    81.8%         1.82
                                                                                -50%    100.0%        2.00
    rrecov / rloss = the growth factor                                          -55%    122.2%        2.22
                                                                                -60%    150.0%        2.50
   This can be represented by the following equation:                          -65%    185.7%        2.86
                                                                                -70%    233.3%        3.33


                 1                                                              -75%    300.0%        4.00


                        –1
                                                                                -80%    400.0%        5.00

     rrecov =                                                                   -85%    566.7%        6.67

              (1+rloss)                                                         -90%
                                                                                -95%
                                                                                        900.0%
                                                                                        1900.0%
                                                                                                     10.00
                                                                                                     20.00
                  8

 Downside risk




Source: FE.
                                                                                                                                9

 Relying solely on volatility as a proxy for risk




                                                         Investment A                      Investment B          Investment C
       Month 1                                               2.0%                                        5.0%          -5.0%

       Month 2                                               4.0%                                        5.0%          -5.0%

       Month 3                                               9.2%                                        5.0%          -5.0%

       Volatility (SD)                                         3.8                                           0            0%

       Return                                               15.7%                                        15.7%        –14.3%




Source: This slide is for illustrative purposes only. The figures do not represent actual investments.
                                                                                        10

 Ratios




Source: FE, bid to bid, net income reinvested , annualised from 31.10.08 to 31.10.11.
                                                                         11

 AA tools




   It is not our area of expertise to comment on ATR tools but
    where they lead to prescribed investment decisions by risk
    we have a view

   Whilst theoretical risk parameters are kept with a boxing
    method of risk by numbers, investors don't have full flexibility
    to adjust to markets and this can lead to selling an asset that is
    appreciating to buy one which is depreciating to keep within the
    risk box

   Many new multi manager risk solutions are placed within the
    unclassified sector making relative comparisons on risk return
    to peers difficult
                                                                            12

 AA Tools




   Stochastic modelling looks backwards and trys to project
    forwards – The world we live in now is not the same

   MPT – Modern portfolio theory works on the academic belief
    that holding all the major assets all of the time you increase the
    risk / return of a portfolio – not so , a la property in recent times

   Many asset allocation tools fail at fund levels by boxing active
    managers by tracking errors – the result you would ignore lots
    of talent for core monies like Neil Woodford of IP

   Use a panel but, also use your discrection
                                                                           13

 Assess suitability – Investment

Global Emerging Markets may represent 55% of Global market cap by 2030




Source: IMF, MSCI, Goldman Sachs Global ECS Research estimates 08.09.10.
                                                   14

 IMA Report to April 2011 – Sectors (NET sales)




Source: IMA Report to April 2011
                       15

 Issues for the IFA
                                                                                            16

 Best vs. worst UK Unit Trust/OEIC in 2007




Source: Financial Express, bid to bid, net income reinvested in GBP 31.12.06 to 31.12.07.
                                                                                            17

 Best vs. worst UK Unit Trust/OEIC in 2008




Source: Financial Express, bid to bid, net income reinvested in GBP 31.12.07 to 31.12.08.
                                                                                            18

 Best vs. worst UK Unit Trust/OEIC in 2009




Source: Financial Express, bid to bid, net income reinvested in GBP 31.12.08 to 31.12.09.
                                                                                            19

 Best vs. worst UK Unit Trust/OEIC in 2010




Source: Financial Express, bid to bid, net income reinvested in GBP 31.12.09 to 31.12.10.
                                                                                               20

 Over the last year…




                                                                             1st Quartile

                                                                             to

                                                                             3rd Quartile or

             moved from                                                      4th Quartile

             performance over the previous 12 months




Source: Financial Express,, bid to bid, net income reinvested from 31.08.09 to 31.08.11.
                                                                                                                                                                21

 Cost of missing best ten days




     https://www.fidelity.co.in/market_volatility/timing.html


Source: Fidelity FundsNetwork. The chart shows how a notional Rs. One lakh investment would have been affected if the ten best days were missed, using
daily returns of the BSE Sensex (source: Bloomberg) for the calculations fro m 31.07.01 to 31.07.11. Indices are not a representation of a financial product.
The do not take account of costs or tax and do not reflect performance of any individual portfolio of stocks.
Past performance is not an indicator of future performance.
                                                                                   22

 Active vs. passive investing




  Active                               Passive

      Potential for out-performance         Lower charges

      Can react to market conditions        Less trading (often computer driven)

      Access to smaller companies



      Higher charges                        No potential for out-performance

      Can underperform the market           Tracking error / rebalancing

                                            Must stay fully invested

                                            Only feasible for larger markets
                                                                                                                                                     23

 FTSE 100 performance 2010: +12.7%




     Best performers 2010

                                                                              Average Weight %                      Total Return %
           Fresnillo                                                                                0.16                         +114.3
           Burberry Group                                                                           0.25                           +92.9
           Petrofac                                                                                 0.23                           +68.1
           Antofagasta                                                                              0.30                           +65.3
           Wolseley                                                                                 0.31                           +64.1




Source: FactSet, Bloomberg 31.12.09 to 31.12.10. Average weights are FTSE 100 average weights over 12 months to 31.12.10. on a buy and hold basis.
                                                                                                                                                     24

 FTSE 100 performance 2010: +12.7%




     Worst performers 2010

                                                                              Average Weight %                      Total Return %
           Resolution                                                                               0.10                            -28.0
           BP                                                                                       6.53                            -21.2
           Capita Group                                                                             0.33                             -5.2
           HSBC Holdings                                                                            8.25                             -5.0
           Marks & Spencer Group                                                                    0.41                             -4.0




           Avoiding one or two stocks would lead to outperformance
           …but index managers can’t avoid this risk




Source: FactSet, Bloomberg 31.12.09 to 31.12.10. Average weights are FTSE 100 average weights over 12 months to 31.12.10. on a buy and hold basis.
                                                                                                                          25

 Stockmarket performance




     31.12.99 to 31.08.11

                                                                                             % Change    % Total Return

           FTSE 100                                                                             -22.16          +20.27

           S&P 500                                                                              -17.63            +2.01

           Nikkei 225                                                                           -37.15           -28.23

           DAX                                                                                 +18.37           +18.37*

           CAC 40                                                                               -22.18            +9.04




Source: Bloomberg as at 31.08.11. Figures based on GBP currency. *No dividends or coupons.
                                                                                                                                                           26

 Discrete performance – Jupiter Merlin Income

Calendar year performance


                                                              YTD           2010   2009   2008    2007   2006   2005   2004   2003   2002    2001   2000

    Jupiter Merlin Income Portfolio                            -2.8         12.5   17.4   -10.8    2.8   11.0   17.0   11.8   15.2    -5.2   -2.2    5.9

    IMA Cautious Managed average                               -3.0          8.6   15.9   -15.8    1.4    7.0   12.6    9.4   14.4   -11.8   -4.9    1.1

    Relative performance                                      +0.2          +3.9   +1.5   +5.0    +1.4   +4.1   +4.5   +2.4   +0.8   +6.6    +2.6   +4.8

    Quartile rank                                                  2          1      2       2      2      1       1     1      2       1      2      1




Source: Financial Express, bid to bid, net income reinvested to 31.08.11.
                                                            27

 Analyzing funds




   Fund manager tenure

   Risk vs. return (including discrete returns)

   Maximum loss

   ABI vs. IMA

   Stock and sector over/underweight (just as important)

   Number of holdings

   Commonality / overlap on funds held
                 28

 FundsLibrary
                                                                           29

 Hiding the truth?




    Watch out for the
                               *. Who’s performance record is it really?
    There are no hard and fast rules as fund managers move
     around and new funds are launched



      Fund management is an art not a science;
      it is a peoples business

      John Chatfield Roberts, Director, Jupiter
                                                                                                                                           30

 Brick in the snake – Discrete as well as cumulative




     Jupiter European Fund performance over 5 years
                  Jupiter - European Inc TR in GB                               FTSE World Europe EX UK Index TR in GB
                  IMA Europe Excluding UK TR in GB                              Jupiter - European Inc TR in GB
                   90
                   80
                   70
                   60
                   50
                   40
       % Growth




                   30      22.1
                                   18.8 16.4                                                          17.6
                   20
                                                                                                                         9.4
                   10                                                                                                          3.4   4.7
                    0
                                                               -0.3 -3.4 -5.2                                -0.2 -1.5
                  -10                                                            -4.0
                                                                                        -5.8 -6.8
                  -20
                  -30
                  -40
                              2006-2007                          2007-2008         2008-2009           2009-2010          2010-2011




Source: Financial Express, bid to bid, net income reinvested to 31.08.11.
                                                          31

 Risk metrics




   To be used in conjunction with performance analysis
    to determine the risk / reward trade of

   Beta

   Alpha

   Standard deviation and tracking errors

   Correlation

   Maximum drawdown and many more, all can be found
    on websites provided or direct from your manager
                                                                                                                                 32

 Jupiter North American Income Fund – Risk & Return




     Risk/return over 5 years

                  60

                  50

                  40

                  30

                  20                S&P 500
       % Change




                  10

                   0

                  -10

                  -20

                  -30

                  -40
                        15           16                  17                 18         19           20       21   22   23   24
                                                                                     Annualised Volatility




Source: Financial Express, bid to bid, net income reinvested 31.08.06 to 31.08.11.
                                                                                                                                 33

 Criteria for ratings – 1 of 2




  Agency              Description                                                             Criteria

  Standard & Poor’s   Takes into account investment process and managers’ consistency of      Less than 20% of funds receive a
  Fund Management     performance                                                             rating
  Ratings

  Morningstar         Overall Morningstar Ratings™ grades fund based on their risk-adjusted   5 star:   top 10%
                      returns within Morningstar Categories over separate performance         4 star:   next 22.5%
                      period depending on how long the fund has been running. The separate    3 star:   middle 35%
                      periods are 36 months, 60 months and 120 months.                        2 star:   next 22.5%
                                                                                              1 star:   bottom 10%

  Forsyth-OBSR        Examines fund’s investment style, process, performance and risk         Funds must be ‘highly
                                                                                              commendable’ or better
                                                                                                                                         34

 Criteria for ratings – 2 of 2




  Agency            Description                                                                      Criteria

  Citywire Fund     Focusses on manager’s ability, regardless of fund managed, calculating           ‘Only a handful of managers
  Manager Ratings   the level outperformance against the benchmark                                   receive
                                                                                                     a rating’

  Lipper Leaders    Funds that are awarded Lipper Leader status have excelled when                   Both measures are scored on a 1
                    compared to similar funds. Lipper’s scoring system is built on three             to 5 basis (with 1 being the
                    years of historical performance and is based on two main elements:               highest). Funds that score 1 for
                    ‘preservation’, the ability of the fund to preserve capital, even during any     either measure are awarded
                    market downturn and ‘consistent return’, the ability of a fund to provide        ‘Lipper Leader’ recognition.
                    consistently superior returns when compared to similar funds.

  Trustnet Alpha    The calculation is achieved by constructing an artificial portfolio, as if the   The rating is based on three
  Manager Ratings   manager’s funds had been bought and sold during the period he/she                components:
                    managed them. The weighting between funds is equal, but is halved if              Risk-adjusted alpha (with track
                    the fund is co-managed and the manager is also a sole manager on                   record length bias)
                    another fund. Any periods where there is no record of fund manager                Consistent outperformance of
                    performance, perhaps due to gardening leave, is treated as a flat period.          a benchmark overall
                                                                                                      Out/underperformance
                                                                                                       consistency in up and
                                                                                                       down markets
                                                             35

 ABI vs. IMA




  Jupiter High Income Fund

     Fund sits within IMA UK equity and bond sector

     Fund invests 80% in UK equity, 20% UK fixed interest
                                                                        36

 ABI vs. IMA




  Jupiter High Income Fund

     For Life and Pensions money, use ABI classification

     ABI do not have a UK equity and bond sector

     Fund is therefore placed in most appropriate sector – UK equity
      is included in this case

     Problems?
                                                            37

 Specialism – is it your role to pick them?




    Is it your job or that of a MultiManager?

    If it’s the IFA, you must keep an eye on these funds
     more regularly

    Possibly quarterly reviews, rather than annual

    Monitor these funds with more detailed analysis
                                                                                                                       38

 Specialist sector – Apples and Pears




     Top 5 performing funds over 5 years

            Fund                                                               %

            Smith & Williamson - Global Gold & Resources                    140.7    Gold and Mining Resources Fund

            BlackRock - Gold & General                                      134.9    Gold and Mining Resources Fund

            Investec - Global Gold                                          128.5    Gold and Mining Resources Fund

            Franklin Templeton - Franklin India                             116.3    Indian Equities

            Fidelity - Latin America                                        113.2    Latin American Equities




Source: Financial Express, bid to bid, net income reinvested to 31.08.11.
                                                            39

 Finding funds




   How many funds should you look at?

   How much time do ‘you’ have?

   Consider your limits – holistic advice




        BUT with over 2000 UK funds alone to choose from,
                  you need filters and a system
                                                                  40

 Directory




   www.barcap.com/egs        Equity-Gilt Study

   www.obsr.co.uk            Ratings and fund information

   www.ipdindex.co.uk        Property

   www.reita.org             REITS information

   www.trustnet.com          Performance & multi-manager guide

   www.citywire.co.uk        Fund manager news, views, ratings

   www.apcims.co.uk          Asset allocation model

   www.morningstar.co.uk     Performance & risk data

   www.fundslibrary.co.uk    Factsheets & reports

   www.jupiteronline.co.uk   Jupiter fund information
 The new breed – Absolute return investing


   The differing funds on offer
                                                                         42

 So why now?




   Just look at the last decade for investors
     Two significant bear / negative returning markets for equities
     Cash is not king, and other asset class volatility has increased
     Index returns negative for equity investors
     Correlation stronger between asset classes
                                                                            43

 10 years of returns




Source: Financial Express, bid to bid, net income reinvested to 31.08.11.
                                                                   44

 Absolute returns in mind




   There has been a recent flurry of funds launched in the UK,
    so much so that a new IMA sector has been created

   We endorse the usage of these funds but…

   As part of an overall portfolio or complete solution?

   But NB: They can and have lost money

   They may find it difficult to fully participate in any rally
                                                    45

 IMA definition




                      Absolute Return


                   Funds managed with the aim
                   of delivering absolute
                   (i.e. more than zero) returns
                   in any market conditions.
                   Typically funds in this sector
                   would normally expect
                   to deliver absolute (more
                   than zero) returns on
                   a 12 months basis.
                                                                                         46

 Absolute Return sector (incorporated April 2008)




     IMA Absolute Return sector                Offshore Recognised Absolute Return

           Year               Funds launched     Year                   Funds launched
           1993                            1     1989                                1
           1997                            1     1996                                1
           1998                            1     1997                                2
           2003                            1     1998                                1
           2004                            1     1999                                4
           2005                            4     2000                                2
           2006                            4     2001                                1
           2007                            5     2003                                2
           2008                            8     2004                                2
           2009                          21      2005                                6
           2010                          16      2006                              18
           2011                            6     2007                              11
           Total                         69      2008                                3
                                                 2009                              10
                                                 2010                              15
                                                 2011                                5
                                                 Total                             84




Source: Financial Express..
                                                                                                                             47

 IMA Absolute Return sector members’ performance 2010




     IMA Absolute Return sector                                                      Offshore Recognised Absolute Return




Source: Financial Express, bid to bid, net income reinvested 31.12.09 to 31.12.10.
                                                                                                                  48

 Funds rated by S&P, OBSR and Financial Express




     IMA Absolute Return sector                              Offshore Recognised Absolute Return

                                                      FE                                                   FE
           Fund                        S&P   OBSR   crowns      Fund                               S&P   crowns
           Newton Real Return          AAA    A       2         Insight Absolute UK Equity
                                                                                                   AA      3
                                                                Market Neutral
           Stan Life Global Absolute
                                       AA     A       3
           Return Strategies
                                                                Nordea European Value              AA      2
           Insight Absolute Return     AA     A       3
                                                                Polar Capital UK Absolute Return   AA      1
           BlackRock UK
                                       AA     A       1
           Absolute Alpha                                       BNY Mellon Evolution
                                                                                                    A      1
                                                                Global Alpha
           Threadneedle Absolute
                                        A     A       2
           Return Bond                                          Ennismore European
                                                                                                    A      3
                                                                Small Companies

                                                                GLG UK Select Equity                A      1

                                                                Schroder Emerging Markets Debt
                                                                                                    A      2
                                                                Absolute Return




Source: Trustnet 31.08.11.
                                                           49

 What are the opportunities?




    Long term all weather opportunities for investment

    Lower volatility, lower standard deviation

    The greater potential for protection of capital

    A multitude of different instruments and techniques
     to maintain flexibility
                                                                                50

 Types of Absolute Return



   Equity            Directional         Blackrock UK Absolute Alpha




                     Directional             Jupiter Absolute Return



 Multi-Asset        Target Return             Standard Life GARS



                   Market Neutral   Absolute Insight UK Equity Market Neutral
                                                51

 Examples of funds and differences




   Insight Market Neutral – Cash Plus Return

   Standard Life GARS – Targeted return

   Jupiter AR – Absolute Return
                                                                            52

 Failure of managed funds




     Performance over ten years




Source: Financial Express, bid to bid, net income reinvested to 31.08.11.
                                                                            53

 The nascent sectors credentials




     Performance since July 2005




Source: Financial Express, bid to bid, net income reinvested to 31.08.11.
 Methods employed
                                                     55

 Legislation helps




    UCITS III and soon IV

    Hedge fund techniques can be used in UK Funds
     under regulation

    Thus the emergence of absolute return funds
                                                                          56

 UCITS new powers




  UCITS III

    Absolute Return funds have the ability to invest in a wider range
     of instruments to a much greater degree compared to traditional
     long only funds

    Making use of greater degrees of cash weighting

    Using derivatives not only to maximise returns but also to protect
     portfolios, as opposed to simply EPM used in traditional funds

    Swaps, CFD’s, pair trades, index derivatives and much more can
     be used synthetically
                                                                                           57

 Golden ticket?




   You can trade on Comex – But there will be dealing costs, storage, insurance etc..

    …So we trade on ETC’s market – Cost effective, but can you market time?



   Gold acts as an inflation hedge, currency hedge and also acts as a flight to quality
    asset in recessionary times

   US Dollar risk to consider & no yield, but only held as part of overall portfolio
                                                                                                                    58

 UCITS III – Absolute Return (“sophisticated”) vs. Long Only (“non-sophisticated”) funds

Funds managed with the aim of delivering absolute (i.e. more than zero) returns in
any market conditions. Typically, funds in this sector would normally expect to
deliver absolute (more than zero) returns on a 12 month basis.                  IMA



   Long only                                                Absolute return

      Long only                                               Long and (“synthetic”) short strategies – like
                                                                hedge funds
      Highly correlated to equity/fixed interest indices
                                                               Low correlation to equity returns
      Outperformance rather than absolute returns
                                                               Aim for positive returns in all market conditions
      Limited ability to protect the fund when market
       is falling                                              Can actively manage the fund’s market exposure
                                                                (long, short or neutral).
      Derivatives used for “efficient portfolio
       management” purposes only                               Derivatives for investment and hedging purposes

      “Commitment” approach to risk management                Value at Risk (VaR)

      Regulated by FSA                                        Regulated by FSA (unlike hedge funds)
                                                                                      59

 Evaluating – Absolute return funds




  Qualitative aspects                        Quantitative aspects

     Investment philosophy and objectives       VaR, drawdown, volatility, alpha,
                                                  correlation and many more
     Resources

     Investment process

     Portfolio construction

     Risk
                                                              60

 How to monitor




   Corporate and individual / team experience

   Managers ability

   To what extent new powers will be used

   Main asset play or multi asset

   Risk monitoring and managements

   Understanding and articulation of fees

   USE WEBSITES OVERLEAF

   (see appendices for performance fee method of our fund)
                                                                  61

 The Future




   Investors have a choice of an potential all weather vehicle

   Less correlation to market

   Cash plus, Target & Absolute return strategies available,
    designed to return with less volatility

   Not all are the same, not all will perform as 2009 proved
                                                                      62

 How will the performance fee work?

Performance Fee


    Fee is calculated and accrued daily in the price and is paid
     annually, from the fund, on 31 October each year (the last day
     of accounting year). However, this 15% performance fee
     will only be paid if the fund outperforms the Hurdle and
     High Water Mark
                                                   63

 Websites and surveys




  www.fundslibrary.co.uk    Fund comparison site

  www.defaqto.co.uk         Guide to sector

  www.obsr.co.uk            Research & ratings

  www.investopedia.co.uk    Glossary of terms

  www.jupiteronline.co.uk   Jupiter AR Fund
                                                                           64

 A possible process for picking funds?




  Assuming specific client requirements are considered, then

     Look at the majority of funds with a track record, 3 or 5 years+
      on both an absolute and relative basis

     Perform quantitative performance and risk analysis using a tool

     Carry out qualitative research using tool, factsheets and
      independent reports

     Find out how the fund is rated by the major agencies, if not check
      if there are still reasons to choose before filtering out

     Make sure the fund adds to the portfolio’s diversity and does not
      concentrate in similar areas for correlation

     Monitor your funds with pre-populated quant reports and regular
      reading / updates, maybe semi annual or more regularly
                                                                       65

 Caveats




   Manger may have recently moved to the group/fund after strong
    performance elsewhere – Eg. Philip Ehrmann, Jupiter China

   Manager may have run offshore/ hedge or institutional
    mandates and has a strong record to bring to the retail market –
    Eg. Philip Gibbs, Jupiter Absolute Return

   Fund may be a new derivative of another successful fund /
    manager Eg. Ariel Bezalel, Co manager of Jupiter High Income
    and Manager of short term success with Strategic Bond

   Fund may have new manager and become a recovery story Eg.
    Ben Whitmore, Jupiter UK Special Situations

   Fund maybe a new concept with suitability for modern
    investing – AR fund as above
                                                                 66

 Making changes - To manage or not to manage?




   Is the IFA an investment expert or financial planner?

   It all takes a lot of time, resource, and this costs money

   World is changing and fast so dynamic portfolios required

   Too much choice, so how do you slim down but at the same
    time avoid missing new opportunities

   CGT on switches outside of a wrapper

   Paperwork and reporting

   Reviews essential
                                                 67

 Multi Management




                     Abdication or delegation?
                                                                          68

 Benefits of Multi Management




  To manage to not to manage?

     Expert analysis of markets and funds on a daily basis

     Saving time so more can be spent on clients and their core needs

     Diversification with access to more than just conventional
      onshore funds

     Investment risk can be spread, as our funds hold an average of 12
      underlying funds and that gives access to well over 1000 stocks

     Consolidation of your core holdings, one portfolio, one report,
      one point of contact
                                                                  69

 Practical solutions for investors




    Financial planning
      Influence the variables that you control
      Maximise use of tax breaks etc
      Constantly evaluate your financial goals

    Investing
      Manage your expectations
      Adopt a forward looking focus
      Use flexible mandates
      Embrace risk
      Analyse performance over meaningful time periods




“A goal without a plan is just a wish” Antoine de Saint-Exupery
                                                                                                                         70

 Minimum amount earned per hour of work



                                                       PORTFOLIO SIZE

      HOURLY
       RATE             £25,000   £50,000   £75,000   £100,000   £125,000      £150,000   £200,000    £250,000


                  £25      5.00     10.00     15.00      20.00      25.00         30.00      40.00       50.00

                  £50      2.50      5.00      7.50      10.00      12.50         15.00      20.00       25.00

                  £75      1.67      3.33      5.00       6.67          8.33      10.00      13.33       16.67

              £100         1.25      2.50      3.75       5.00          6.25       7.50      10.00       12.50

              £125         1.00      2.00      3.00       4.00          5.00       6.00        8.00      10.00
                                                                                                                  TIME
              £150         0.83      1.67      2.50       3.33          4.17       5.00        6.67        8.33

              £175         0.71      1.43      2.14       2.86          3.57       4.29        5.71        7.14

              £200         0.63      1.25      1.88       2.50          3.13       3.75        5.00        6.25

              £225         0.56      1.11      1.67       2.22          2.78       3.33        4.44        5.56

              £250         0.50      1.00      1.50       2.00          2.50       3.00        4.00        5.00

                        £125.00   £250.00   £375.00    £500.00    £625.00       £750.00   £1,000.00   £1,250.00

                                                       RENEWAL FEES




Source: Jupiter
                         71

 Reduce your workload
 Merlin Market view
                                                                                                                                                      73

 Jupiter Independent Funds team




                                                                      John Chatfeild-Roberts
                                                                      Director
                                                       2001 to Present – Jupiter Asset Management
                                                       1995 to 2001 – Lazard Asset Management
                                                       1989 to 1995 – Henderson Global Investors




                    Algy Smith-Maxwell                                                                                Peter Lawery
                    Director                                                                                          Director
      2001 to Present – Jupiter Asset Management                                                       2001 to Present – Jupiter Asset Management
      1999 to 2001 – Lazard Asset Management                                                           1992 to 2001 – Lazard Asset Management
      1995 to 1999 – Henderson Global Investors
                                                                    74

 Merlin View




   Cash – recent deployment of cash to buy defensive managers

   Fixed Interest – Main strategy to buy Strategic Bond Managers

   UK Equities – Defensive, experienced Income Managers

   Global Equities – Like US Global winners, GEM Direct and
    indirect, u/w Europe

   Others – No Property, hold Gold and energy funds




  We always look at fundamentals, and for liquidity
  and long terms absolute returns!
                                                                                                                                                                                  75

 Market thoughts

Global emerging markets – powerful demographics


     Working age population
      Emerging          Developed

      4,500
                                                                                                                                                              4,002 4,033 4,025
      4,000                                                                                                                                    3,873 3,953
                                                                                                                                       3,749
                                                                                                                               3,591
                                                                                                                       3,420
      3,500                                                                                                    3,202
                                                                                                       2,946
      3,000
                                                                                               2,671
                                                                                       2,419
      2,500
                                                                               2,187
                                                                       1,936
      2,000                                                    1,684
                                                       1,469
      1,500                                    1,294
                                      1,137
               898     961 1,034
      1,000                                                               745     768     784     805     823     836     830     820     809     796    784     771    758    744
                                          613     646     680     713
                  526     556     579
        500

           0
                1950     55      60       65     70      75      80      85      90      95     2000     05      10E     15E     20E     25E 30E        35E     40E    45E    50E


Rapid growth of middle class will drive wealth creation,
consumption and urbanisation
Source: UNPD, Morgan Stanley June 2009.
                                                                                                                                                              76

 Decoupling; 10 years of proof?

Growth in emerging markets (6.1%) to outpace developed (1.5%)*


     Outperformance over ten years = 275%
    % Growth
                                                                                                                            MSCI EM (Emerging Markets) 291.1%
            400

            350

            300

            250

            200

            150

            100
                                                                                                                                          S&P 500 Index 16.3%
             50

               0

            -50
               2001               2002             2003             2004             2005             2006    2007   2008        2009       2010       2011




Source: Financial Express, total return 31.08.01 to 31.08.11. *Source: Morgan Stanley 2012 growth estimate.
                                                                         77

 Our Market is global




  The new “normal”

     70% + of FTSE 100 earnings are overseas

     2 constituents of FTSE 100 are Kazakhstan copper miners

     No link between GDP and FTSE growth as a result

     Income managers with strong dividends offer Global opportunities
      with UK security
                                                                                                    78

 Colgate: Developed world company – developing world growth




         Iconic brand with leading 44% global     BRIC sales = 46% of total sales
          market share
                                                                                     Market share

         Highly profitable operating margins      Brazil                                    70%
          of 24%
                                                   Russia                                    35%
         Exposed to emerging world dynamics       India                                     51%
          but with:
                                                   China                                     32%
             Economic & accounting transparency
             Corporate governance
             Subject to the rule of law




Source: Colgate, Jupiter
                                                                 79

 Making changes – to manage or not to manage?




   Is the IFA an investment expert or financial planner?

   It all takes a lot of time, resource, and this costs money

   World is changing and fast so dynamic portfolios required

   Too much choice, so how do you slim down but at the same
    time avoid missing new opportunities

   CGT on switches outside of a wrapper

   Paperwork and reporting

   Reviews essential
                                                                 80

 Managers we hold - Include




   Richard Woolnough, M&G, Ariel Bezalel, Jupiter – Strategic
    Bond Funds

   Neil Woodford – IP Income, Tom Dobell – M&G Recovery

   Angus Tulloch & Martin Lau –First State Asia Funds

   James Findlay – Findlay Park US

   Gold ETF / Energy Funds



   We always look at fundamentals, and for liquidity and long
    terms absolute returns!
                            81

 Final comments




   Platforms and Pricing



  www.theplatforum.co.uk
                                                                                                             82

 Disclosure




  Jupiter Unit Trust Managers Limited (‘JUTM’) and Jupiter Asset Management Limited (‘JAM’) are
  both registered in England and Wales (nos. 2009040 and 2036243). The registered office of both is 1
  Grosvenor Place, London SW1X 7JJ. JUTM and JAM are authorised and regulated by the Financial
  Services Authority whose address is 25 The North Colonnade, Canary Wharf, London E14 5HS.
  This presentation is intended for investment professionals and not for the benefit of private investors.
  However any one attending the presentation or who has the opportunity to view the accompanying
  slides should bear in mind that the value of an investment in a unit trust and the income from it can
  go down as well as up. It may be affected by exchange rate variations and you may not get back the
  amount invested. Initial charges are likely to have a greater proportionate effect on returns if
  investments are liquidated in the shorter term. Quoted yields are not guaranteed. Current tax levels
  and reliefs will depend on the nature of the holding and details are contained in the key features
  documents. Past performance should not be seen as a guide to future performance.
  For your security we may record or randomly monitor all telephone calls. If you are unsure of the
  suitability of an investment please contact your financial advisor. Any data or views given should not
  be construed as investment advice. Every effort is made to ensure the accuracy of the information
  but no assurance or warranties are given.

								
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