Voya Financial, Inc. · NYSE:VOYA
Voya Financial — Investor Presentation (July 2023)
36 slides from Voya Financial's investor presentation, July 2023
Slide 1: Voya Global Perspectives: Market. Insights. Opportunities
Voya Global Perspectives Market. Insights. Opportunities . July 2023 Voya Global Perspectives® 20230113-2669564-8472926
Slide 2: 2023 Forecast
2023 Forecast Voya Global Perspectives® 2 20230113-2669564-8472926
Slide 3: Advancing Earnings Drive the Market
Advancing Earnings Drive the Market Corporate earnings growth is a barometer for the health of the global economy. 4,500 Quarterly Earnings Growth (YoY) Earnings growth changed to positive 85% 1Q22 EPS– 1 = 0.03% Earnings growth changed to negative 4,000 1Q21 EPS 65% 3,500 S&P 500 EPS Growth S&P 500
Slide 4: Broadening Manufacturing
Broadening Manufacturing Global Manufacturing PMIs U.S. Industrial Production Index Level Index Level Expansionary (>50) China U.S. Contractionary (<50) recessionary periods U.S. Euro Source: Institute of Supply Management, FactSet. The Purchasing Managers' Index (PMI) is an indicator of economic ac
Slide 5: Consumer as Game Changer
Consumer as Game Changer At about 70% of gross domestic product (GDP), the U.S. consumer is a game changer. $ Billions per month U.S. Retail Sales Source: FactSet. U.S. retail sales as of 5/31/23. Voya Global Perspectives® 5 20230113-2669564-8472926
Slide 6: Diversification
Diversification Global effective diversification has beaten the S&P 500 over a long period of time 1H 3 5 10 15 20 Index 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2023 years years years years years Equity S&P 500 16.9 (18.1) 28.7 18.4 31.5 (4.4) 21.8 12.0 1.4 14.9 32
Slide 7: A Plan for the Inevitable Bear Market beats Stay the Course
A Plan for the Inevitable Bear Market beats “Stay the Course” Strategic and tactical allocation over 22 years shows that active management may add value especially in market downturns. Source: FactSet, Voya Investment Management. As of 12/31/22. Strategic allocation includes 10 asset classes, equall
Slide 8: Europe Lags U.S. Markets
Europe 20 Years Europe Lags U.S. Markets S&P 500 Growth of $ MSCI EAFE Bloomberg US Aggregate Bloomberg Global Agg Data as of 6/3023. The S&P 500 Index covers 500 industrial, utility, transportation and financial companies of the U.S. markets (mostly NYSE issues). The Index represents about 75% of NY
Slide 9: The Fed
The Fed Fed Funds Target Rate Percent (%) Average Source: FactSet, Fed Funds Target Rate, data as of 6/30/23. Average Fed Funds Rate is average since 1988. FAIT = Flexible Average Inflation Targeting (effected in August 2020). Voya Global Perspectives® 9 20230113-2669564-8472926
Slide 10: U.S. Export, Import Growth (YoY % Change)
U.S. Export, Import Growth (YoY % Change) U.S. trade is highly dependent on global economic growth. Recession % Source: FactSet. Data as of 5/31/23. Voya Global Perspectives® 10 20230113-2669564-8472926
Slide 11: Housing
Housing S&P Case Shiller Housing Index Case-Shiller % (LHS) 1-Year Case-Shiller % change Index Level Case-Shiller Level (RHS) Source: FactSet, S&/P Case-Shiller as of 4/30/23. Voya Global Perspectives® 11 20230113-2669564-8472926
Slide 12: Inflation
Inflation Core CPI Y/Y Core PCE Y/Y Percent (%) Headline CPI Y/Y Source: FactSet, Inflation as of 5/31/23 Voya Global Perspectives® 12 20230113-2669564-8472926
Slide 13: Jobs
Jobs The unemployment rate has slowly improved in line with economic growth. Recession Initial claims 5 million Unemployment Rate New Weekly Claims Unemployment Rate (RH) Initial Unemployment Claims (LH) Source: Bureau of Labor Statistics, FactSet. Data as of 6/30/23. Voya Global Perspectives® 13 20
Slide 14: Dow Jones Industrials (price only, 100 years)
Dow Jones Industrials (price only — 100 years) It is not unusual for stocks to have prolonged periods of volatile returns. Great Recession 2007-2009 2022 Inflation Tech Wreck Q1 2020 Reaganomics 2000-2002 Global Pandemic Log OPEC Oil Crisis Inflation-Volker Fed Cuban Missile Crisis WWII Great Depres
Slide 15: Index Total Returns
Index Total Returns Index 1H 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 1 year 3 years 5 years 10 years Broad Market Dow Industrial 4.9 (6.9) 20.9 9.7 25.3 (3.5) 28.1 16.5 0.2 10.0 29.7 10.2 8.4 14.1 22.7 1.9 12.3 9.6 11.3 S&P 500 16.9 (18.1) 28.7 18.4 31.5 (4.4) 21.8
Slide 16: The Fed Model
The Fed Model Stock and Bond comparison translated into comparable valuations Earnings Yield (solid = forward, dotted = trailing) U.S. Treasury Yield (10 year) Percent (%) Equivalent to P/E* of 19.2 EPS Yield 5.22% Equivalent to P/E* of 26.2 T-Yield 3.81% Data as of 6/30/23. * P/E is Price/Earnings
Slide 17: U.S. Consumer Confidence
U.S. Consumer Confidence Present Situation Index Index Level Consumer Confidence Index Source: Factset; data as of 6/30/2023 Voya Global Perspectives® 17 20230113-2669564-8472926
Slide 18: Performance by Market Capitalization
Performance by Market Capitalization Mid-cap stocks generally have grown faster than large caps since 2005 and growth over value. Mid Cap Large Cap Small Cap Index Price Growth of $ Russell 1000 Growth Index Russell 1000 Value Index Data as of 6/30/23. Large-cap companies are typically firms with a
Slide 19: The Fed: Central Bank Balance Sheets
The Fed The U.S. Federal Reserve and other Central Banks are again expanding their balance sheets. Fed Balance Sheet ($) ECB Balance Sheet (€) Assets in Local Currency - Millions BoJ Balance Sheet (¥) Source: FactSet, Voya Investment Management, as of 6/30/23. ECB = European Central Bank; BoJ = Bank
Slide 20: Equity Volatility (VIX)
Equity Volatility (VIX) Volatility tends to spike when investors get complacent after long periods of low vol 12/31/07 = 22.5 Lehman Crisis Coronavirus China 11/20/08 = 80.9 Euro Crisis U.S. Credit Currency Downgrade 12/31/08 = 40.0 Devaluation 06/30/23 = 13.6 Brexit Index Level Historical Average D
Slide 21: Bond and Loan Returns
Bond and Loan Returns Index 1H 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 1 year 3 years 5 years 10 years U.S. Investment Grade Treasury 1.6 (12.5) (2.3) 8.0 6.9 0.9 2.3 1.0 0.8 5.1 (2.7) 2.0 9.8 5.9 (5.8) (4.8) 0.4 1.0 Treasury (1-3YR) 1.0 (3.8) (0.6) 3.2 3.6 1.6 0.4 0.9
Slide 22: Global Yields
Global Yields Investors seeking income may benefit from the higher yield available from global bonds. Current 10-Year Sovereign Bond Yields as of 6/30/23 Source: FactSet. Past performance is no guarantee of future results. An investment cannot be made in an index. Voya Global Perspectives® 22 202301
Slide 23: Growth and Inflation
Growth and Inflation The 10-year U.S. Treasury yield historically tracks real U.S. GDP and inflation. Inflation – Core CPI Y/Y 10-Year Treasury Yield Real U.S. GDP Percent (%) Source: FactSet. Real U.S. GDP growth as of 3/31/23, CPI and 10-Year Treasury Yield data as of 6/30/23. Voya Global Perspect
Slide 24: Credit Spreads and TED Spread
Credit Spreads and TED Spread Credit spreads indicative of risk : low or narrow is good; high or wide is bad High Yield Spreads TED Spread (Libor – 3-month Treasury) Lehman crisis Basis Points Percent (%) Source: Moody’s, Reuters, Federal Reserve, FactSet, as of 6/30/23. Note: The TED spread is the
Slide 25: International Economics
International Economics The “Big 3” dominate the global economy while the U.S. and China are putting distance on Europe Countries GDP Trade (% of GDP) Demographics Per Capita Exports Population Unemployment Developed Markets USD (Billions) ($1000) 1-Yr Change (Goods Only) (Millions) % Median Age U.S
Slide 26: Savings Rates and Household Net Worth
Savings Rates and Household Net Worth Savings Rate Household Net Worth 3 month average, % of disposable income $ trillions Source: Bureau of Economic Analysis, Federal Reserve, FactSet. Savings rate data as of 5/31/23; household net worth data as of 5/31/23. Note: BEA implemented a metrics revision
Slide 27: Commodities Prices
Commodities Prices Gold actually sells for less today in real — inflation-adjusted — terms than in 1980. $/ton $/oz. COPPER $/ton GOLD Nominal Price/oz. GOLD Real Price/oz. CRB Index Source: FactSet. Note Gold’s “real price/oz.” is equal to the indexed nominal gold price divided by the CPI U.S. Data
Slide 28: WTI Crude Oil Prices
WTI Crude Oil Prices Crude oil prices are a good indicator of global demand with too high and too low both ominous Crude Oil (NYM $/barrel) $70.64 per 30-year average = $53.2/barrel Barrel Source: FactSet. Data as of 6/30/23. Note: Oil prices are represented by West Texas Intermediate light crude sp
Slide 29: U.S. Government Debt and Deficit
U.S. Government Debt and Deficit U.S. Government Debt Debt Levels $31.4 Trillion % of GDP $ Trillions Source: FactSet. U.S. government debt data as of 5/31/23, debt level data as of 3/31/23. Voya Global Perspectives® 29 20230113-2669564-8472926
Slide 30: Corporate Income Tax Rates
Corporate Income Tax Rates U.S. corporate income taxes were slashed in 2017 improving its competitive advantage. Source: Organization for Economic Cooperation and Development. Data as of 2022. Voya Global Perspectives® 30 20230113-2669564-8472926
Slide 31: The Folly of Gaming Diversification
The Folly of Gaming Diversification Source: FactSet, Voya Investment Management. Note: “Global AA” includes 10 asset classes, equally weighted: S&P 500, S&P 400 Midcap, S&P 600 Smallcap, MSCI U.S. REIT Index/FTSE EPRA REIT Index, MSCI EAFE Index, MSCI EM Index, Bloomberg Barclays U.S. Corporate Bond
Slide 32: Sequence of Returns Matters
Sequence of Returns Matters It is crucial to de-risk once retirement begins due to possible adverse “Sequence of Returns”. Date Annual Income Annual Returns Portfolio Value Annual Returns Portfolio Value Starting Nest Egg Value $ 1,000,000 $ 1,000,000 Year 1 $ 40,000 -5% 912,000 15% 1,104,000 Year 2
Slide 33: Index Definitions
Index Definitions Bloomberg Barclays U.S. Aggregate Bond Index is composed of U.S. securities in Treasury, FTSE NAREIT U.S. Real Estate Index presents comprehensive REIT performance across the Government-Related, Corporate and Securitized sectors that are of investment-grade quality or U.S. economy,
Slide 34: Index Definitions
Index Definitions Asset classes are represented by the following indexes: S&P SmallCap 600 Index covers approximately 3% of the domestic equities Bloomberg Barclays U.S. Corporate Bond Index is a component of the Bloomberg Barclays U.S. market and is designed to represent a portfolio of small compan
Slide 35: Index Definitions
Index Definitions MSCI U.S. REIT Index is a free float-adjusted market capitalization weighted index comprised of Russell Midcap Value Index measures the performance of the mid-cap value equity REITs that generate a majority of their revenue and income from real estate rental and segment of the U.S.
Slide 36: Important Disclosures
Important Disclosures This information is proprietary and cannot be reproduced or distributed. Certain information may be received from sources Voya Investment Management (“Voya IM”) considers reliable; Voya IM does not represent that such information is accurate or complete. Certain statements cont