Virtus Investment Partners, Inc. · NYSE:VRTS
Virtus Investment Partners — Kleinwort Benson Investors — Investor Presentation (June 2015)
27 slides from Virtus Investment Partners's investor presentation, June 2015
Slide 1: Kleinwort Benson Investors - Foreign Ords International Equity Strategy
Kleinwort Benson Investors - Foreign Ords International Equity Strategy 28B00ZT5 28B00XCP 28S00288 Signatory: UN Principles For Responsible Investment Manager of Investment Manager of Investment The Year (Ireland) The Year (Ireland)
Slide 2: Agenda
Agenda Business Philosophy Overview & Team Portfolio & Investment Additional Process Performance Slides 2
Slide 3: Who we are
Who we are *AUM as at 30th June, 2015. This is the combined AUM of Kleinwort Benson Investors Dublin Ltd and Kleinwort Benson Investors International Ltd as at 30th June, 2015.
Slide 4: Agenda
Agenda i Business Philosophy Overview & Team Portfolio & Investment Additional Process Performance slides 4
Slide 5: Investment team
Investment team (table) Key People Title Experience Tenure Noel O’Halloran Chief Investment Officer 27 23 Gareth Maher Head of Portfolio Management 28 15 David Hogarty Head of Strategy Development 24 21 Ian Madden Portfolio Manager 15 15 James Collery Portfolio Manager 15 15 John Looby Portfolio Man
Slide 6: Investment team
Investment team (p Average experience: 21 years Average tenure: 13 years 6
Slide 7: What we have delivered
$ What we have delivered Consistency Downside Less Risk Protection Strategy Benchmark 40 30 20 10 0 -10 -20 -30 -40 -50 Source: Kleinwort Benson Investors, data relates to KBI EAFE strategy, in USD, relative to MSCI EAFE index. MSCI benchmark returns assume the reinvestment of dividends after the de
Slide 8: Time to rethink your assumptions
EM Time to rethink your assumptions North Pacific Emerging Europe Total America Basin Markets No. of Dividend 563 415 441 756 2,175 Payers No. of Stocks 723 450 460 836 2,469 Dividend Yield 1.8% 2.8% 2.1% 2.7% 2.3% Dividend Payout 33% 46% 35% 35% 37% Dividend Growth 5.5% 5.9% 5.7% 6.6% 6.0% Source:
Slide 9: We achieve this because we look at things differently
We achieve this because we look at things differently Contrary to conventional wisdom: • Dividends and profits are highly correlated over time • Economic growth and equity returns are not the same thing • Low tracking error does not mean low excess return • Stocks returns are highly varied within in
Slide 10: Dividends and earnings revisions are highly correlated
Dividends and earnings revisions are highly correlated 10 Source: Thomson Reuters Datastream as of 30 June 2015.
Slide 11: Dispersion of Returns (MSCI World)
Dispersion of Returns (MSCI World) Range & Index Returns - Latest 3 Years (Cumulative Return) (axis capped at 500 for ease of display) 500.00 400.00 300.00 Rate of Return % cumulative 200.00 100.00 91.4 90.6 99.1 95.3 80.1 75.9 81.9 52.5 51.3 45.6 55.9 50.6 63.9 60.2 55.2 48.0 38.9 48.0 31.1 40.4 52
Slide 12: Agenda
Agenda portfolio Business Philosophy Overview & Team Portfolio & Investment Additional Process Performance slides 12
Slide 13: Segment the market into 72 Regional Industry Groups
Segment the market into 72 Regional Industry Groups: Look in All Regions, All Industry Groups and All Capitalizations for stocks Regions = Developed Europe, Japan and Developed Asian ex Japan (Pac Basin) Industry Group = MSCI GICS system of classification (a further split up of each sector) for exam
Slide 14: Summary of process
EMEAFE Summary of process Monthly systematic component Judgemental component 900 stocks (approx) Create regional industry group segments from MSCI Index Eliminate stocks below segment average yield 450 stocks Step Lower yield stocks, countries, industries will qualify (approx) 1 Annually The “framew
Slide 15: RIG example: Japan Real Estate
RIG example: Japan Real Estate Number of stocks: 17 RIG (MSCI) weight 9 stocks fail RIG average dividend Japan Prime Realty Payout ratio 6 stocks fail Investment cap Nippon Building Free cash flow 6 stocks fail Fund Inc. Sustainability, quality & growth United Urban Dividend growth 3 stocks fail Inv
Slide 16: Stock and segment example: Daito Trust
€ Stock and segment example: Daito Trust Sector: Japanese Real Estate Company: Daito Trust Relative performance Characteristic (3 years to 31st March 2015) Daito Trust 160 Sample Daito Trust 150 Dividend Yield (%) 2.7 140 Dividend Growth (%) Better Total 130 20.3 Return 120 Total Payout Yield (%) 4.
Slide 17: International Developed strategy characteristics
International Developed strategy characteristics MSCI International EAFE Mkt. Cap International MSCI EAFE +/- Strategy $bn Strategy (%) Index (%) (%) Index <3 6.5 2.9 3.6 Dividend Yield (%) 4.2 3.0 3–5 8.2 5.6 2.6 Dividend Payout (%) 58.4 48.2 Better Total 5 – 10 17.4 13.3 4.1 Dividend Growth (%) 10
Slide 18: International Developed strategy: sector and regional composition
International Developed strategy: sector and regional composition Sector Breakdown Geographical Breakdown 4.5% 5.6% 11.9% 7.2% 28.1% Europe 23.4% Japan 12.5% 64.7% Pacific Basin excl. Japan 5.0% 11.1% Top 10 holdings Name Country Weight% 12.4% 4.1% HSBC Holdings Plc UK 3.3 9.5% Zurich Insurance Grou
Slide 19: International Developed country breakdown
International Developed country breakdown Australia 9.6% Belgium 0.3% Denmark 0.2% United Kingdom 25.8% Finland 1.5% France 6.2% Germany 5.3% Hong Kong 1.1% Italy 2.7% Switzerland 9.0% Sweden 5.2% Japan 23.4% Spain 4.0% Singapore 1.2% Portugal 0.6% Norway 0.7% Netherlands 3.2% Source: Kleinwort Bens
Slide 20: A stable equity strategy
A stable equity strategy Active Share 100 Diversified stock picking Concentrated stock picking 80 Strongest performers tend 60 to occupy this quadrant Importantly, our returns are not a result of yield exposure 40 20 Passive Factor bets Tracking 0 2 4 6 8 10 Error Past performance is not indicative
Slide 21: Value v Growth
Value v Growth The rolling 10 – Year underperformance of Value vs. Growth 60 50 40 30 20 10 0 -10 -20 -30 -40 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 Data: MSCI World. Source: Thomson Reuters Datastream, as at 30th June 2015: MSCI World Value Index NR vs MSCI World Growth Index NR 21
Slide 22: Agenda
Agenda perf Business Philosophy Overview & Team Portfolio & Investment Additional Process Performance Slides 22
Slide 23: KBI EAFE Performance vs. MSCI EAFE (NR) Index
KBI EAFE Performance vs. MSCI EAFE (NR) Index 30th June 2015 KBI EAFE KBI EAFE MSCI Excess Strategy Net Strategy Gross EAFE (NR) Rtn. Information Period Return % Return % Index % % Ratio 1 Year -9.0 -6.3 -4.2 -2.1 3 Yrs p.a. 9.6 12.9 12.0 0.9 0.4 5 Yrs p.a. 6.9 10.1 9.5 0.6 0.3 7 Yrs p.a. -0.2 2.8 2
Slide 24: KBI EAFE Performance vs. MSCI EAFE (NR) Value Index
KBI EAFE Performance vs. MSCI EAFE (NR) Value Index 30th June 2015 KBI EAFE KBI EAFE MSCI Excess Strategy Net Strategy Gross EAFE (NR) Rtn Information Period Returns % Returns % Value Index % % Ratio 1 Year -9.0 -6.3 -7.1 0.8 3 Yrs p.a. 9.6 12.9 11.8 1.1 0.4 5 Yrs p.a. 6.9 10.1 8.9 1.2 0.4 7 Yrs p.a
Slide 25: Agenda
Agenda add sl Business Philosophy Overview & Team Portfolio & Investment Additional Process Performance Slides 25
Slide 26: Disclaimers
Disclaimers USA/CANADA: Kleinwort Benson Investors International Ltd. is a registered investment adviser with the SEC and regulated by the Central Bank of Ireland. Kleinwort Benson Investors International Ltd. is a majority-owned subsidiary of Kleinwort Benson Investors Dublin Ltd. Form ADV Part 1 a
Slide 27: Disclaimers
Disclaimers Industry/Sector Concentration: A strategy that focuses its investments in a particular industry or sector will be more sensitive to conditions that affect that industry or sector than a non-concentrated fund. Equity Securities: The market price of equity securities may be affected by fin
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