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Jupiter India Select SICAV
Avinash Vazirani
September 2012
FOR PROFESSIONAL AUDIENCES ONLY. NOT FOR RETAIL INVESTORS
Agenda
Jupiter Asset Management
Track record and fund performance
India macro
Challenges
Investment philosophy and process
Fund details
2
Mutual funds, £18,054m
Segregated mandates, £2,927m
Private clients, £1,824m
Investment trusts, £566m
Introduction to Jupiter
Assets under management Established in 1985
434 employees including
66 Investment Professionals
One of Europe’s most successful and
respected fund management houses,
managing assets of £23.4bn
Market cap £1bn*
Source: Jupiter 30.06.12. *Source: Bloomberg as at 30.06.12.
3
Jupiter – EM Assets Under Management
£400m
£660m
£840m
£350m
£580m
£760m
£380m
£80m
£90m
£240m
£430m
£330m
£110m
£70m
£110m
£60m
£110m
£140m
£70m £50m
£140m
£70m
£260m
£300m
£190m
£0.5bn
£0.8bn
£1.2bn
£0.6bn
£1.2bn
£1.6bn
£970m
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec-11
AU
M (
£m
)
Emerging Europe India Asia China
Long-term track record and experience. Deep local knowledge.
4
Source: Jupiter as at 31.12.11. Please note: the AUM figures have been calculated according to geographical area rather than by fund manager.
5
Jupiter’s Emerging Markets and Specialists resources
India
Avinash Vazirani
Amelie Thevenet
Asia
Philip Ehrmann
Ben Surtees
Charlie Sunnucks
Emerging Europe
Elena Shaftan
Ingrid Kukuljan
Colin Croft
Global
Kathryn Langridge
Financials Guy de Blonay
Robert Mumby
Environmental Charlie Thomas
Chris Watt
Emma Howard Boyd
Abbie Llewellyn-Waters
Latin America
Kathryn Langridge Middle East
& Africa
Kathryn Langridge Ingrid Kukuljan
Building on strength and experience Long term track record
Deep local knowledge
Track record and fund performance
7
Avinash Vazirani
Fund Management Director
Avinash Vazirani
Jupiter Asset Management
18 years’ experience of investing in India
Current role Head, South Asia Equities Team
Current
responsibilities
Manager, Jupiter India Fund (Unit Trust),
Jupiter India Select SICAV and institutional assets
2007 – Current Jupiter Asset Management
Fund Management Director, International Equities
2005 – 2007
Peninsular Capital Partners LLP
Founder & Managing Partner
1997 – 2005 BNP Paribas Asset Management
CIO, South Asia & Africa
1994 – 1997 GEM Dolphin Investment Managers
CEO
1993 – 1994 John Lusty Group Plc.
COO – led MBI and subsequently sold the company
Qualification Chartered Accountant (ACA 1986)
Awards 2000 – Standard & Poor’s Fund Awards – Winner
(Peninsular South Asia Access Fund)
2002 – Standard & Poor’s Fund Awards – Winner
(Peninsular South Asia Access Fund)
2003 – Standard & Poor’s Fund Awards – Winner
(Peninsular South Asia Access Fund)
Source: Citywire, Morningstar OBSR as at 31.07.12. Past performance is no guide to the future. Note: Years of experience as at 31.07.12.
8
-200
0
200
400
600
800
1000
1200
1400
1600
Jul 95 May 98 Mar 01 Feb 04 Dec 06 Oct 09 Aug 12
% G
row
th
PSAIC/Jupiter India Select SICAV IFCI India/MSCI India
Performance track record
Source: Jupiter / Lipper 14.07.95. to 31.08.12.
Peninsular South Asia Access Fund / Jupiter India Select SICAV vs. IFCI India / MSCI India*
*The fund manager, Avinash Vazirani, managed the Peninsular South Asia Access Fund from Jan 1997 to May 2008. The Peninsular South Asia Access Fund was not a
UCITS scheme, and therefore not subject to the same regulatory framework as the Jupiter Global Fund. The performance figures of this fund are shown as a
representation of the fund manager’s experience and are not necessarily indicative of the potential performance of the Jupiter India Fund SICAV. JGF Jupiter India
SICAV launched 02.05.2008, Peninsular South Asia Access Fund launched 14.07.1995. Benchmark : IFCI India TR Index until 31.12.01, MSCI India TR from 31.12.01
IFCI India MSCI India
Peninsular South Asia Access Jupiter India Select
The investment case for India
4.4
5.8
3.8
8.5
7.6
9.5 9.6 9.3
6.7
8.4 8.4
6.5
5.4
0
2
4
6
8
10
12
FY01 FY03 FY05 FY07 FY09 FY11 FY13E
Real
GD
P G
row
th %
Indian GDP growth
10
Source: CSO, Citigroup estimates – July 2012.
Real GDP growth (%) – year ending 31 March GDP by expenditure in 2010
-10
0
10
20
30
40
50
60
70
80
90
100
110
India China ASEAN
%
Net exports Gross capital formation
Government consumption Private consumption
Demographic dividend
India is a young country
11
Literacy rates
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1991 2010
Adult Youth
Source: Euromonitor, CEIC, CLSA Asia-Pacific Markets – June 2012.
12
Poor people getting richer
Rising middle class to drive growth
Source: National Council for Applied Economic Research income models, Euromonitor, BCG income distribution adjustment model, BCG analysis, 29.02.12.
Note: Spending is calculated in nominal dollars. $1 = 46 rupees.
India is following China
13
0
2000
4000
6000
8000
10000
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010
India China
Per capita GDP (PPP basis, US$)
Source: IMF, IIFL Research 31.12.11.
14
Domestic consumption growth
*CEIC, Standard Chartered Research – October 2011. **Hewitt, CEIC, Standard Chartered Research, Citigroup – October 2011.
Rural wages*… Consumption is resilient**…
…undergoing a paradigm shift …despite falling urban wages growth
The systematic and steep rise in non-food consumption in India post 1991
15
Source: CEIC, Ambit Capital Research 31.12.11.
16
High propensity to save
The EM consumer is underleveraged
Source: IMF IFS, Central Bank data, Bank of America Merrill Lynch Global research estimates. Data to end 2009.
CSO, Ministry of Finance, Citigroup estimates – February 2012.
23.2
25.7
32.4
34.6
32.0 32.3 33.5
0
5
10
15
20
25
30
35
40
FY01 FY03 FY05 FY07 FY09 FY11 FY13E
% G
DP
Gross domestic savings as % of GDP
17
Economy - led by services and internal consumption
GDP growth driven by domestic consumption
Exports as % of GDP
Services now account for 59% of GDP
Source: CSO, Citigroup Global Markets – February 2012.
Growing role of services in GDP – % share
Source: WTO, IMF, IIFL Research. Not including oil exports
18
India is relatively insulated from the global slowdown
*Centre for Monitoring Indian Economy, Citigroup – August 2011. **Haver, IMF, Citi Investment Research & Analysis. (Data for 2010).
Direction of Indian exports* Government debt in selected countries**
Exports are only 20% of GDP
The share of US and Europe has come
down from 52.3% in 2000 to 31.7% in 2011
India’s debt is largely domestic
Current concerns
Growth is slowing down
20
Source: Emerging Advisors Group – April 2012.
Investment growth falling… …But still high in absolute terms
21
Source: Emerging Advisors Group – April 2012. Fund manager views of the at the time of writing and will change in the future.
Investment growth
Investment pickup now underway
Source: Markit September 2012
PMI
22
And this is what the GDP deflator tells you This is what CPI tells you
Inflation – too high?
Source: Emerging Advisors Group – April 2012. Note: CPI = Consumer Price Index.
23
Source: Bloomberg – August 2012 .
Monetary policy – start of the easing cycle
2
3
4
5
6
7
8
9
10
11
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
10 year gvt bond yield Cash Reserve Ratio Repo rate
Government finances: not so bad
24
Government debt to GDP – decreasing
75.7
81.0
85.3 86.0
80.1
78.3
74.0
68.6
70.7 70.6
67.0 66.1
60
65
70
75
80
85
90
CY '00 CY '01 CY '02 CY '03 CY '04 CY '05 CY '06 CY '07 CY '08 CY '09 CY '10 CY '11E
% G
DP
Source: International Monetary Fund, Reserve Bank of India , First Global Research – April 2012.
Indian equity market
Financials 28%
IT 16%
Energy 13%
Consumer Staples
10%
Materials 8%
Consumer Discretionary
8%
Health Care 6%
Industrials 5%
Utilities 4%
Telecoms 2%
Indian Equity market
India market capitalization: USD1.12trn
(as of 7th September 2012)
Current market cap of Nifty stocks:
USD633.8bn (as of 7th September 2012)
Average daily trading volume
(up to 30.06.12):
26
MSCI India sector breakdown
(USD in bn) YTD 2011 2010
Cash 2.5 2.9 4.3
Derivatives 25.2* 28.0 22.0
Source: Bloomberg, MSCI India – 31.08.12. *For current year we have taken the INR @ 56, for 2011 INR @ 49, for 2010 INR @ 45
Valuations – now significantly lower
1-year rolling forward P/E* 1-year rolling forward P/B & ROE**
Source: BSE, RBI, Kotak Institutional Equities estimates September 2012.
27
4
8
12
16
20
24
28
Sep 02 Sep 04 Sep 06 Sep 08 Sep 10 Sep 12
12 months rolling forward P/E (X)
10
15
20
25
30
0
1
2
3
4
5
6
Sep 02 Sep 04 Sep 06 Sep 08 Sep 10 Sep 12
P/B (X) RoE (%) (RHS)
The investment philosophy and process
Our philosophy
Identification and focus on longer-term trends
Fundamentals always come through
Focus on companies with a sound business, good management
and corporate governance, with interest of shareholders at heart
Preference for “price makers”
Seeking above average growth at reasonable valuations
GARP investing (Growth At Reasonable Price)
29
Investment process
30
Bottom-up stock picking
High conviction
Focus on fundamentals
Direct company contact
Performance driven
Do not “closet track” the index
Buy and hold, not traders
Avoid hyped sectors
Know what you invest in
Focus on returns
Jupiter India: fund details
Portfolio breakdown – Jupiter India Select SICAV
Portfolio features Top 10 holdings
Market cap split**
Holding % Fund
Godfrey Phillips India 9.5
Nestle India 4.8
Opto Circuits India 4.4
Sun Pharmaceutical Industries 3.7
ICICI Bank 3.5
United Spirits 3.1
ING Vysya Bank 2.6
Tech Mahindra 2.6
Tata Motors 2.4
Infosys Technologies 2.3
Source: Jupiter as at 31.08.12. *Some of this exposure is through derivatives. **Large: >$2bn, Mid: $0.5bn – $2bn, Small: <$0.5bn.
Number of holdings* 82
Equities 99.5%
Cash 0.5%
Large, 38.6%
Mid, 44.8%
Small, 16.1% Cash, 0.5%
32
33
Source: Jupiter / FactSet, in USD, as at 31.08.12.
0% 5% 10% 15% 20% 25% 30%
Oil & Gas
Telecommunications
Basic Materials
Utilities
Consumer Services
Technology
Health Care
Industrials
Consumer Goods
Financials
MSCI India Jupiter India Select SICAV
Jupiter India Select SICAV – Sector breakdown
Selected ratios – 31 August 2012
Jupiter India Select Nifty Index
Portfolio characteristics
Return on Equity 19.27% 18.12%
Dividend yield 1.72% 1.61%
Valuations
Trailing 12M P/E 11.78x 12.54x
Historical Price-to-Book 1.49x 2.22x
34
Source: Jupiter, Bloomberg – 31.08.12.
Disclosure
35
2639_SCV_INDIA_AV
Jupiter Asset Management Limited (‘JAM’) is registered in England and Wales (nos. 2036243). The registered office is 1 Grosvenor Place,
London SW1X 7JJ. JAM is 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 retail 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. Past performance should not be seen as a guide to future performance.
This fund can invest more than 35% of its value in securities issued or guaranteed by an EEA state. The Key Investor Information Document
and the Fund Prospectus are available from Jupiter on request. The Key Investor Information Document (KIID) is available in the following
languages: English, Dutch, Finnish, Swedish, Portuguese, French and German.
This Fund will be investing in a single geographic area which is in the course of development and therefore is an area at greater risk of
volatility. Fees and expenses are generally higher in emerging markets than they are in western markets. Returns may also be affected by
changing political, regulatory and fiscal measures.
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.
This document contains information based on the MSCI India Index and MSCI Emerging Markets India. Neither MSCI nor any other party
involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with
respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of
originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of
the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data
have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the
possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent.
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