BMO US Equity Buffer Hedged to CAD ETF - July Trust · NEO:ZJUL
BMO US Equity Buffer Hedged to CAD ETF - July Trust — F&C Investment Trust — FY2020 Earnings Presentation
57 slides from BMO US Equity Buffer Hedged to CAD ETF - July Trust's earnings presentation, March 2021
Slide 1: F&C Investment Trust 2020 Results Presentation
WF 1215033 UK Classification: only to be shown if not public F&C Investment Trust 2020 Results Presentation March 2021
Slide 2: Investment risk
Investment risk Classification: only to be shown if not public The value of investments is dependent on the supply and demand for the shares of the Investment Trust rather than its underlying assets. The value of your investment will not be the same as the value of the Investment Trust’s underlying
Slide 3: Over 150 years of innovation
Over 150 years of innovation Classification: only to be shown if not public • World’s oldest investment trust • A dividend paid every year since 1868 • 50 years of consecutive dividend rises* • 11 managers in 150 years, three since 1969 • Started investing in bonds, 95% equity by 1965 • First equity
Slide 4: 2020 Results
Classification: only to be shown if not public 2020 Results 4
Slide 5: Discrete performance
Discrete performance Classification: only to be shown if not public Percentage growth 12m to October 2020 2019 2018 2017 2016 F&C Investment Trust Share Price TR 4.6 22.9 -0.6 21.0 23.7 F&C Investment Trust NAV 12.3 19.2 -3.4 17.0 23.8 Benchmark 12.4 21.6 -4.0 13.2 28.8 Past performance should not b
Slide 6: Final results to December 2020
Final results to 31 December 2020 Classification: only to be shown if not public • Shareholder total return of 4.6%, NAV total return of 12.3%. Market index total return of 12.4% • Discount of 5.4% at end 2020 – widening from 1.5% premium. 5.97m shares purchased in buybacks • Net revenue return per
Slide 7: 2020 total shareholder return of 4.6%
2020 total shareholder return of 4.6% Classification: only to be shown if not public 15.0 0.1% 1.2% -0.8% -0.4% -0.3% 10.0 -7.7% 12.5% 12.9% 12.3% 12.3% 12.4% 5.0 4.6% 4.6% 0.0 Past performance should not be seen as an indication of future performance. Source: BMO Global Asset Management as at 31-De
Slide 8: Performance in 2020
Performance in 2020 Classification: only to be shown if not public • Despite unprecedented volatility in equity markets 2020 saw a NAV total return of 12.3% for the year • Private equity delivered returns of 13.6% in 2020 with newer commitments delivering particularly strong returns • Europe and Jap
Slide 9: Underlying performance in 2020
Underlying performance in 2020 Classification: only to be shown if not public Allocation to Underlying Benchmark Portfolio Index strategy allocation weighting performance performance % % % % % North America 40.7 54.5 58.3 16.0 15.8 Europe inc UK 9.9 23.1 17.2 8.6 2.8 Japan 4.9 7.2 7.4 20.9 10.7 Emer
Slide 10: Underlying performance over 1, 3 and 5 years
Underlying performance over 1,3 and 5 years Classification: only to be shown if not public 1 Year, % 3 Year, % 5 Year, % Return Index Return Index Return Index North America 16.0 15.8 48.9 46.7 121.2 119.0 Europe inc UK 8.6 2.8 14.4 10.4 55.7 55.0 Japan 20.9 10.7 21.1 17.0 76.7 64.3 Emerging Markets
Slide 11: Strategy Allocations
Strategy Allocations Classification: only to be shown if not public % Allocation to Strategy 30 25 20 15 10 5 0 T Rowe (US Barrow Europe inc Emerging Japan Global Global Sustainable Pyrford Private Growth) Hanley (US UK Markets Small Cap Income Global Global Equity Value) Dec-19 Dec-20 Source: BMO G
Slide 12: 2020 developments
2020 developments Classification: only to be shown if not public • Reduction in allocation to Global Income strategy • Allocation to Pyrford for a Global equities strategy • Allocation to BMO Sustainable Opportunities strategy • Reduced stock count of T Rowe Price mandate along with Japan and Smalle
Slide 13: 2020 developments
2020 developments Classification: only to be shown if not public • The Board have agreed a re-commitment to private equity opportunities ‒ Continue to aim for 5-15% allocation to private market opportunities ‒ US$180m allocated to a bespoke, focused Pantheon programme of future growth opportunities,
Slide 14: Private equity
Private equity Classification: only to be shown if not public • Good returns (13.6%) overall in 2020 continuing long term excess returns against public market equivalents • Historic holdings from Pantheon and Harbourvest realized net £27.0m in cashflow and delivered a return of 8.0% • Recent commitm
Slide 15: Private equity
Private equity Classification: only to be shown if not public • 2020 was another encouraging year from our newer investments • Year end valuation of £274.1m, a TVPI (Total Value to Paid In) of 1.3x and 15% IRR, reflecting continued robust performance of the investment programme despite the difficult
Slide 16: Revenue and dividends
Revenue and dividends Classification: only to be shown if not public • Proposed final dividend of 3.4p, leading to Revenue and dividends per share (p) 12.1p annual payment; an increase of 4.3% 14 • 50th consecutive rise in annual dividends and 153rd dividend payment 12 • 25.7% decline in net revenue
Slide 17: Borrowings
Borrowings Classification: only to be shown if not public Weighted average cost of debt (%) by year • £455m gross debt at year end 8 • Net gearing level (debt at par) ended 2020 at 8.0% 7 • Blended borrowing rate 2.3% at 6 year end 5 4 3 2 1 0 2013 2020 Source: BMO Global Asset Management as at 31-D
Slide 18: Company rating, buybacks and issuance
Company rating, buybacks and issuance Classification: only to be shown if not public • 5.97m of buybacks in 2020 after two Net buybacks/issuance (millions of shares) consecutive years of net issuance 10 • Rating moved from a premium of 1.5% 0 to a discount of 5.4% over the year -10 • Board committed
Slide 19: OCF and management fees
OCF and management fees Classification: only to be shown if not public • Further reduction in OCF to 0.59% in part Ongoing charges figure reflecting the benefits of fee 0.90% arrangements introduced in 2019 0.80% 0.70% 0.60% 0.50% 2014 2015 2016 2017 2018 2019 2020 Source: BMO Global Asset Managemen
Slide 20: Sustainability and ESG
Sustainability and ESG Classification: only to be shown if not public • All underlying managers of listed assets are signatories of UN PRI with BMO GAM one of the founder signatories • We have continued to enhance our reporting in recent years and have comprehensive reporting of our policies alongsi
Slide 21: Sustainability and ESG
Sustainability and ESG Classification: only to be shown if not public • The Trust has made a clear commitment Portfolio Holdings Support for UN SDGs to net zero carbon • We are now measuring and reporting on how our listed holdings support the UN Sustainable Development Goals • We invested into a BM
Slide 22: Look-through exposure
Look-through exposure Classification: only to be shown if not public Fund weight by region (inc. Private Equity) Listed equity sector exposure Developed Pacific 2.6% Liquidity Technology 22.2% 1.0% UK 7.0% North Financials 18.1% America Japan 54.0% Consumer Services 15.4% 7.1% Industrials 14.8% Emer
Slide 23: Performance overview – end December 2020
Performance overview – end December 2020 Classification: only to be shown if not public FCIT Open ended shareholder AIC FCIT NAV AIC funds Market return Qtl return Qtl return benchmark 3m 15.7% 2 9.2% 2 8.8% 8.5% 6m 16.2% 3 13.6% 2 12.8% 12.0% 1 year 4.6% 3 12.3% 2 12.0% 12.4% 3 years pa 8.5% 3 8.9%
Slide 24: Appendix 1 - Evolution of the Trust
Classification: only to be shown if not public Appendix 1 - Evolution of the Trust 24
Slide 25: 1. More global
1. More global Classification: only to be shown if not public Global vs UK equity returns 300 250 Global Equities 200 150 UK Equities 100 50 2012 2013 2014 2015 2016 2017 2018 2019 2020 Past performance should not be seen as an indication of future performance. Source: BMO Global Asset Management, B
Slide 26: 2. Active approach
2. Active approach Classification: only to be shown if not public Strategy Primary Manager Approach % Allocated Holdings Active Share % Regional US Growth Growth 24.6 69 70 US Value Value 13.3 50 82 Fundamental Europe 9.9 45 88 quality value Japan Quality GARP 4.9 20 83 Emerging Markets Long-term qu
Slide 27: 3. Diversified across strategies
3. Diversified across strategies Classification: only to be shown if not public Risk contribution by strategy Diversification benefit Source: BMO Global Asset Management as at 31-Dec-20. 27
Slide 28: 4. Private equity weighting
4. Private equity weighting Classification: only to be shown if not public Re-commitments to private equity 20 15 10 5 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 % Legacy Private Equity % New Private Equity Source: BMO Global Asset Management as at 31 Dec 20. 28
Slide 29: 5. Gearing costs reduced
5. Gearing costs reduced Classification: only to be shown if not public • 0-20% permitted gearing, varied between 6-14% since 2012 • Net gearing 8.0% of net assets (debt at par) • Weighted average cost of debt down from 7.1% at end 2013 to 2.3% at end 2020 Gross debt at market value outstanding: £45
Slide 30: 6. Dividends
6. Dividends Classification: only to be shown if not public • Focus on total return – balance income needs with capital considerations • Commitment to continue rises in dividends Dividend per share (p) 14 12 10 8 6 4 2 0 2013 2014 2015 2016 2017 2018 2019 2020 Past performance should not be seen as
Slide 31: Company rating, buybacks and issuance
Company rating, buybacks and issuance Classification: only to be shown if not public • 2018 and 2019 saw consecutive years Net buybacks/issuance (millions of shares) of net issuance 10 • c6m shares bought back in 2020 as 0 discount widened from a premium -10 rating -20 • Board committed to use buyba
Slide 32: FCIT since 2014
FCIT since 2014 Classification: only to be shown if not public Returns vs comparators (from July 2014) Paul Niven appointed Fund Manager for F&C Investment Trust, July 2014. Discount / Premium (year-end levels) 140 AIC** 4.0 Median 2.0 130 0.0 120 -2.0 % Return Discount % -4.0 110 -6.0 -8.0 100 -10.
Slide 33: Performance overview – end February 2021
Performance overview – end February 2021 Classification: only to be shown if not public FCIT Open ended shareholder AIC FCIT NAV AIC funds Market return Qtl return Qtl return benchmark ytd -3.7% 3 -0.1% 3 0.2% -0.4% 6m 8.7% 3 9.0% 2 9.7% 8.3% 1 year 14.2% 3 19.9% 2 20.9% 18.8% 3 years pa 6.8% 3 8.7%
Slide 34: Appendix 2 - Market backdrop and outlook
Classification: only to be shown if not public Appendix 2 - Market backdrop and outlook Views and opinions expressed by individual authors do not necessarily represent those of BMO Global Asset Management. 34
Slide 35: US expected to recover pre-Covid GDP by end 2021
US expected to recover pre-Covid GDP by end 2021 Classification: only to be shown if not public Q4 2020 GDP Forecasts (% yoy) Q4 ‘20 plus Q4 ‘21 GDP Forecasts (% over 2 years) 12.0 10.0 EM 8.0 Q4 2021 GDP Forecasts (%) 10.0 UK 6.0 GDP Forecasts (%) 8.0 4.0 2.0 US 6.0 EZ EM 0.0 4.0 -2.0 CA EZ US -4.0
Slide 36: Pent-up demand and excess savings
Pent-up demand and excess savings Classification: only to be shown if not public Personal Saving Rate Personal Income 40.0 14.0% 12.42% 35.0 12.0% 10.02% 30.0 10.0% 8.0% 25.0 6.0% 20.0 4.0% 15.0 2.0% 0.92%0.75% 0.70% 0.70% 0.58% 10.0 0.0% -2.0% -1.05% -0.68% -1.23% 5.0 -1.85% -4.0% -2.72% 0.0 -4.02%
Slide 37: Labor market slack
Labor market slack Classification: only to be shown if not public Unemployment Rate % • Levels of unemployment have declined to 6.3% since spiking in the spring of 2020 and U-6 25.0% 22.9% unemployment rate at 11.1% 20.0% • Decline in unemployment showed signs of 15.0% U-6 Unemployed & Part Time & 1
Slide 38: Money supply growth at record rate
Money supply growth at record rate Classification: only to be shown if not public US M2 Growth YoY % 30% 25% US M2 Growth YoY 20% 15% 10% 5% 0% 1982 1987 1992 1997 2002 2007 2012 2017 Source: BMO Global Asset Management and Bloomberg as at 19 January 2021 38
Slide 39: Price pressures are rising in the US
Price pressures are rising in the US Classification: only to be shown if not public Purchasing managers’ indices for prices rising 90 ISM PMI onn Business 80 ISM PMI on Business Prices Index 70 Prices Index Services 60 50 40 30 Manufacturing 20 10 2011 2013 2015 2017 2019 2021 Source: BMO Global Ass
Slide 40: US inflation expectations on the Rise
US inflation expectations on the Rise Classification: only to be shown if not public 3.00 2.50 2.50 10-Year Breakeven Inflation Rate % 2.00 2.00 1.50 10 Yr Treasury Yield 1.50 1.00 0.50 1.00 0.00 -0.50 10 Yr Treasury 0.50 Inflation-Indexed Yield -1.00 0.00 -1.50 • Treasury yields have risen since su
Slide 41: Commodity prices rise
Commodity prices rise Classification: only to be shown if not public Agricultural and oil prices are up … … as are metals 190.0 80 400 1200 JP Morgan Agriculture Price 180.0 70 Iron Ore Future Price ($) Copper Future Price ($) Agricultural Price Oil Price per Barrel $ 350 1000 170.0 Index (LHS) 60 1
Slide 42: Real rates finally succumb to rising yields
Real rates finally succumb to rising yields Classification: only to be shown if not public Inflation … and the risk-free rate is very low… Yield on 10 year US inflation protected security 3.5 1.5 Peak = 1.16 US Breakeven Inflation (%) 3.0 1 5Y5Y 2.5 0.5 2.0 % 1.5 0 Average 2017 = 0.44 1.0 -0.5 0.5 1
Slide 43: Bond yields rise in response to improving macro
Bond yields rise in response to improving macro Classification: only to be shown if not public Developed market bonds vs macro surprises Global defensives and bond yields 240 120 130 0.0 *CITI G10 INDEX. † 13WK % CHANGE GDP-WEIGHTED * DEFENSIVES/DM MSCI, TOTAL RETURN INDICES. AVERAGE G7 10YR YIELDS.
Slide 44: Growth / value
Growth / value Classification: only to be shown if not public Developed growth vs value FAAANM/S&P 494 valuation premium 240 240 120 * GROWTH/VALUE INDICES FOR MSCI DEVELOPED FORECAST PE FOR FAAANGM RELATIVE TO FORECAST PE FOR MARKETS. † RATIO OF GROWTH/VALUE ONE YEAR 220 220 S&P494 (S&P500 EX-FAAAN
Slide 45: US equities vs the rest
US equities vs the rest Classification: only to be shown if not public US equities vs Rest of the World Forecast EPS – US vs ROW 280 350 260 US TMT INDEX JANUARY 2007=100 240 300 S&P 500 EPS JAN (2007=100) 220 200 250 180 160 200 140 US EX-TMT 120 150 100 80 100 60 MSCI ALL COUNTRY EX-US MSCI ALL CO
Slide 46: US policy under the 'Blue Wave'
US policy under the ‘Blue Wave’ Classification: only to be shown if not public Constraints Policy Changes International Policy • Tiny majority in Senate, small • Corporate tax increase Engage with allies majority in House • Free trade • Restore full U.S. membership • Filibuster still operates • Phar
Slide 47: Financial conditions tighten
Financial conditions tighten Classification: only to be shown if not public Government Bonds yields rising … %-pt Impact of Real GDP Growth 2.0 2010 - US 2008 2009 2018 2019 2020 2021 Generic Government Bond 10 1.5 Global 1.1 2.3 -0.2 0.4 3.9 -1.9 Canada 1.0 Year Yield (%) Developed 1.2 1.7 -0.3 0.3
Slide 48: Marked contrast between US and Europe
Marked contrast between US and Europe Classification: only to be shown if not public 60 US 50 Composite PMI Index Eurozone 40 UK 30 20 10 Dec 18 Jun 19 Dec 19 Jun 20 Dec 20 Source: BMO Global Asset Management and Bloomberg as at 2 March 2021 Past performance is not indicative of future performance.
Slide 49: China versus the world
China versus the world Classification: only to be shown if not public China’s PMIs slip back… …but EM manufacturing is strong 60 Current: 70 Global Services Jan10-Dec19 Avg: 53.2 53.9 Construction Jan10-Dec19 Avg: 59.9 55 65 Current: 54.7 60 50 Global Manufacturing Jan10-Dec19 Avg: 51.7 Current 55 :
Slide 50: Emerging Markets
Emerging Markets Classification: only to be shown if not public EM easing on all fronts…but the cycle is turning …EM PMIs are in line with DM 50 Composite PMIs Recession 60 Cumulative Interest Rate cuts in 45 Emerging Markets 55 EM (largest 15 by GDP) 40 35 50 30 45 PMI Index 25 40 6m rolling sum 20
Slide 51: Europe struggling
Europe struggling Classification: only to be shown if not public Manufacturing strong but services weak … …and breakevens have been picking up Euro Area PMIs German 10y Breakeven 70 1.6 1.4 60 1.2 50 1 PMI Index % Manufacturing 40 0.8 0.6 30 Services 0.4 20 0.2 10 0 2018 2019 2020 2021 2016 2017 201
Slide 52: Earnings beating expectations…
Earnings beating expectations… Classification: only to be shown if not public 2021 EPS growth may look demanding… …but this is mainly from a weak base 40 S&P 500 EPS Growth (Consensus Forecasts) 30 MSCI All Country EPS Growth 2021 30 20 EPS Growth (% y/y) 2021 % growth (year / year) 20 10 2017 2018
Slide 53: …and could improve further
…and could improve further Classification: only to be shown if not public EPS forecasts set to rise as PMIs improve… …but guidance has fallen from lofty levels US Earnings 80 50 30% Earnings Revisions (%, 4w mov av) 40 S&P 500 Earnings Revisions 70 S&P 500 12m forward 20% ((Upgrades - Downgrades) /
Slide 54: Outlook
Outlook Classification: only to be shown if not public • 2021 looks set to see a brisk return to economic growth globally and the US should recoup lost output by end of the year • Sharp upturn in corporate earnings expected with US gains of 30%+ y/y in some quarters • The bears have been confounded
Slide 55: Disclaimer
Disclaimer Classification: only to be shown if not public Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any products that may be mentioned. © 2021 Morningstar. All Rights Reserved. The informa
Slide 56: Disclaimer
Disclaimer Classification: only to be shown if not public This financial promotion is issued for marketing and information purposes only by BMO Global Asset Management in the UK. F&C Investment Trust Plc is an investment trust and its Ordinary Shares are traded on the main market of the London Stock
Slide 57: Contact us
Contact us Classification: only to be shown if not public BMO Global Asset Management (EMEA) – Head Office Exchange House Primrose Street London EC2A 2NY Tel: +44 (0) 20 7628 8000 Calls may be recorded. bmogam.com Extensive worldwide investment capabilities • Total focus on clients • Comprehensive r