Magellan Global Opportunities Fund - Active ETF · ASX:OPPT
Magellan Global Opportunities Fund - Active ETF — Magellan Flagship Fund — Investor Presentation (April 2008)
68 slides from Magellan Global Opportunities Fund - Active ETF's investor presentation, Apr 3, 2008
Slide 1: Magellan Flagship Fund Limited Investor Briefing
Magellan Flagship Fund Limited Investor Briefing 3 April 2008 1
Slide 2: Important Notice
Important Notice This presentation is provided for informational and discussion purposes only and does not constitute an offer to sell or a solicitation of an offer to purchase any security of Magellan Flagship Fund (“MFF”) or its affiliates. Any current or prospective investors in MFF should consul
Slide 3: Agenda
Agenda 1. Outstanding Businesses at Compelling Valuations 2. Construction of Magellan’s Unique Portfolio 3. World’s Best = Lower Risks & Growth Opportunities 4. FMCG - case studies in profitable returns 5. Markets, Outlooks & Risks 6. Questions & Answers 3
Slide 4: Key Messages
Key Messages Magellan intends to maintain our cautious, risk focussed, rational investing discipline. MFF’s portfolio is absolutely world class, as market dislocations have dropped the prices of some outstanding companies and materially increased our Margins of Safety. In almost all cases, the busin
Slide 5: Key Messages
Key Messages We own some unique businesses which combine: Almost impregnable sustainable advantages in profitable core businesses Relatively low risk multi year sales and margin growth opportunities and growing competitive advantages Earnings rates at multiples of cost of capital Very high profit: f
Slide 6: Key Messages
Key Messages We fully expect our approach to result in attractive shareholder returns over time, although volatile markets should always be expected and we have factored in a sustained economic downturn in our analysis. Stock and bond market irrationality and fluctuations will only moderately impact
Slide 7: Current NTA Snapshot
Current NTA Snapshot (2) Approximate NTA as at 3/4/08 88cps(1) NTA as at 31/12/07 92cps(1) Performance for YTD (after costs) (-4.3%) MSCI in AUD Performance since 31/12/07 (-10.3%) MSCI in AUD Performance since 31/12/06 (-12.2%) ASX 200 Performance since 31/12/07 (-15.4%) ASX 200 Performance since 3
Slide 8: 1. Outstanding Businesses at Compelling Valuations
1. Outstanding Businesses at Compelling Valuations Panic & Pessimism = Opportunities for Prepared Investors Selective international markets offer outstanding investment opportunities for disciplined, medium term focussed investors in quality companies Some outstanding companies offer almost negligib
Slide 9: 1. Outstanding Businesses at Compelling Valuations
1. Outstanding Businesses at Compelling Valuations MFF has acquired shares in some outstanding businesses over the past 15 months where their underlying cashflows will conceivably rise meaningfully for some decades. We have paid a significant discount to our conservative estimates of the present val
Slide 10: Magellan's Portfolio Holdings as at 31/3/08
2. Construction of Magellan’s Unique Portfolio Magellan’s Portfolio Holdings as at 31/3/08 $Am $Am Market Market price price American Express 58.7 Western Union 3.5 Nestlé 37.2 ConnectEast 3.2 eBay 32.9 Moody's 3.1 Yum! Brands 31.6 CVS Caremark 2.7 Wal-Mart 25.4 Walgreen 2.5 PepsiCo 17.4 Novartis 2.
Slide 11: 2. Construction of Magellan's Unique Portfolio
2. Construction of Magellan’s Unique Portfolio - There were no sales in the latest Quarter (after 4/1/08 sale of remaining 78K of Cross Harbour) - We acquired shares in some companies at prices materially below where we had made sales in 2007 (eBay, Tesco, ConnectEast, Google, Wells Fargo). - The bu
Slide 12: 2. Construction of Magellan's Unique Portfolio
2. Construction of Magellan’s Unique Portfolio - We have sought to avoid exposure to some of the areas where investors have suffered or will likely suffer material permanent loss of capital such as: Global Investment Banks, many financial and property companies and emerging market equities - We are
Slide 13: 3. World's Best Companies: Lower Business Risks
3. World’s Best Companies Lower Business Risks Consider the business risks of Nestlé operating in over 200 countries, producing annual after tax free cashflow of well over $10 billion from a suite of products with global acceptance such that the more than 20 which earn annual revenues of more than $
Slide 14: 3. World's Best Companies: Lower Financial Risks
3. World’s Best Companies Lower Financial Risks The competitive positions of our financials are improving as competitors are forced to leave the industry or scale back their operations in retail banking, credit cards and student lending. Contrast the financial strength of Bank of America (US$15 bill
Slide 15: 3. World's Best Companies: Growth Opportunities
3. World’s Best Companies Growth opportunities Perspective:- Australia ranks about #53 in the world in terms of population and #16 in the world for the size of the economy. Most significant business opportunities in history as the populations of more than 200 countries more fully embrace the product
Slide 16: 4. FMCG - case studies in profitable returns
4. FMCG - case studies in profitable returns Nestlé recently forecast an acceleration in its sales growth targets including a 19% gain in annual sales from Russia to about $2 billion. When L’Oreal announced that it achieved double digit eps growth in 2007 for the 23rd year in a row, it unveiled a me
Slide 17: 4. FMCG - case studies in profitable returns
4. FMCG - case studies in profitable returns There are no more than 20 FMCG companies with sizable, growing, profitable presences in at least 50 major global markets and we own some of the best of them, as well as some of the global leaders in financials, internet, software and quick service restaur
Slide 18: 4. FMCG - case studies in profitable returns
4. FMCG - case studies in profitable returns Our FMCG companies are concurrently increasing sales and market shares in multiple countries and have sustained increased prices (and sales) beyond what we anticipated, given rising commodity input costs. They are also not seeing a material impact from ge
Slide 19: 4. Unilever
4. Unilever 19 Unilever, 2008 CAGNY 20th February 2008 presentation, Jim Lawrence, Chief Financial Officer
Slide 20: 4. Unilever
4. Unilever 20 Unilever, 2008 CAGNY 20th February 2008 presentation, Jim Lawrence, Chief Financial Officer
Slide 21: 4. Unilever
4. Unilever 21 Unilever, 2008 CAGNY 20th February 2008 presentation, Jim Lawrence, Chief Financial Officer
Slide 22: 4. Unilever
4. Unilever 22 Unilever, 2008 CAGNY 20th February 2008 presentation, Jim Lawrence, Chief Financial Officer
Slide 23: 4. Unilever
4. Unilever 23 Unilever, 2008 CAGNY 20th February 2008 presentation, Jim Lawrence, Chief Financial Officer
Slide 24: 4. Unilever
4. Unilever 24 Unilever, 2008 CAGNY 20th February 2008 presentation, Jim Lawrence, Chief Financial Officer
Slide 25: 4. Unilever
4. Unilever 25 Unilever, 2008 CAGNY 20th February 2008 presentation, Jim Lawrence, Chief Financial Officer
Slide 26: 4. Unilever
4. Unilever 26 Unilever, 2008 CAGNY 20th February 2008 presentation, Jim Lawrence, Chief Financial Officer
Slide 27: 4. Unilever
4. Unilever 27 Unilever, 2008 CAGNY 20th February 2008 presentation, Jim Lawrence, Chief Financial Officer
Slide 28: 4. Unilever
4. Unilever 28 Unilever, 2008 CAGNY 20th February 2008 presentation, Jim Lawrence, Chief Financial Officer
Slide 29: 4. Unilever
4. Unilever 29 Unilever, 2008 CAGNY 20th February 2008 presentation, Jim Lawrence, Chief Financial Officer
Slide 30: 4. Unilever
4. Unilever 30 Unilever, 2008 CAGNY 20th February 2008 presentation, Jim Lawrence, Chief Financial Officer
Slide 31: 4. Yum! Brands
4. Yum! Brands 31 Yum!, 2007 Investor Update 10th December 2007 presentation, David Novak, Chairman and CEO
Slide 32: 4. Yum! Brands
4. Yum! Brands 32 Yum!, 2007 Investor Update 10th December 2007 presentation, David Novak, Chairman and CEO
Slide 33: 4. Yum! Brands
4. Yum! Brands 33 Yum!, 2007 Investor Update 10th December 2007 presentation, David Novak, Chairman and CEO
Slide 34: 4. Yum! Brands
4. Yum! Brands 34 Yum!, 2007 Investor Update 10th December 2007 presentation, David Novak, Chairman and CEO
Slide 35: 4. Yum! Brands
4. Yum! Brands 35 Yum!, 2007 Investor Update 10th December 2007 presentation, David Novak, Chairman and CEO
Slide 36: 4. Yum! Brands
4. Yum! Brands 36 Yum!, 2007 Investor Update 10th December 2007 presentation, David Novak, Chairman and CEO
Slide 37: 4. Yum! Brands
4. Yum! Brands 37 Yum!, 2007 Investor Update 10th December 2007 presentation, David Novak, Chairman and CEO
Slide 38: 4. Yum! Brands
4. Yum! Brands 38 Yum!, 2007 Investor Update 10th December 2007 presentation, David Novak, Chairman and CEO
Slide 39: 4. Yum! Brands
4. Yum! Brands 39 Yum!, 2007 Investor Update 10th December 2007 presentation, David Novak, Chairman and CEO
Slide 40: 4. Yum! Brands
4. Yum! Brands 40 Yum!, 2007 Investor Update 10th December 2007 presentation, David Novak, Chairman and CEO
Slide 41: 4. L'Oreal
4. L’Oreal 41 L'Oreal, 2007 Results 14th February 2008, Mr. Jean-Paul AGON Chief Executive Officer
Slide 42: 4. L'Oreal
4. L’Oreal 42 L'Oreal, 2007 Results 14th February 2008, Mr. Jean-Paul AGON Chief Executive Officer
Slide 43: 4. L'Oreal
4. L’Oreal 43 L'Oreal, 2007 Results 14th February 2008, Mr. Jean-Paul AGON Chief Executive Officer
Slide 44: 4. L'Oreal
4. L’Oreal 44 L'Oreal, 2007 Results 14th February 2008, Mr. Jean-Paul AGON Chief Executive Officer
Slide 45: 4. L'Oreal
4. L’Oreal 45 L'Oreal, 2007 Results 14th February 2008, Mr. Jean-Paul AGON Chief Executive Officer
Slide 46: 4. L'Oreal
4. L’Oreal 46 L'Oreal, 2007 Results 14th February 2008, Mr. Jean-Paul AGON Chief Executive Officer
Slide 47: 4. L'Oreal
4. L’Oreal 47 L'Oreal, 2007 Results 14th February 2008, Mr. Jean-Paul AGON Chief Executive Officer
Slide 48: 4. L'Oreal
4. L’Oreal 48 L'Oreal, 2007 Results 14th February 2008, Mr. Jean-Paul AGON Chief Executive Officer
Slide 49: 4. L'Oreal
4. L’Oreal 49 L'Oreal, 2007 Results 14th February 2008, Mr. Jean-Paul AGON Chief Executive Officer
Slide 50: 4. L'Oreal
4. L’Oreal 50 L'Oreal, 2007 Results 14th February 2008, Mr. Jean-Paul AGON Chief Executive Officer
Slide 51: 4. L'Oreal
4. L’Oreal 51 L'Oreal, 2007 Results 14th February 2008, Mr. Jean-Paul AGON Chief Executive Officer
Slide 52: 4. L'Oreal
4. L’Oreal 52 L'Oreal, 2007 Results 14th February 2008, Mr. Jean-Paul AGON Chief Executive Officer
Slide 53: 4. L'Oreal
4. L’Oreal 53 L'Oreal, 2007 Results 14th February 2008, Mr. Jean-Paul AGON Chief Executive Officer
Slide 54: 4. Nestlé
4. Nestlé 54 Nestlé, 2007 Full Year results road show, 25th February 2008, Paul Bulcke, CEO
Slide 55: 4. Nestlé
4. Nestlé 55 Nestlé, 2007 Full Year results road show, 25th February 2008, Paul Bulcke, CEO
Slide 56: 4. Nestlé
4. Nestlé 56 Nestlé, 2007 Full Year results road show, 25th February 2008, Paul Bulcke, CEO
Slide 57: 4. Nestlé
4. Nestlé 57 Nestlé, 2007 Full Year results road show, 25th February 2008, Paul Bulcke, CEO
Slide 58: 4. Nestlé
4. Nestlé 58 Nestlé, 2007 Full Year results road show, 25th February 2008, Paul Bulcke, CEO
Slide 59: 4. Nestlé
4. Nestlé 59 Nestlé, 2007 Full Year results road show, 25th February 2008, Paul Bulcke, CEO
Slide 60: 5. Markets, Outlooks & Risks
5. Markets, Outlooks & Risks Massive discrepancies in markets:- Some market beset by fear and panic pushing depressed prices to irrational lows. Some continue in the grip of speculative excess, for example extrapolation of current supply/demand dislocations. Some speculative bubbles in the process o
Slide 61: 5. Markets, Outlooks & Risks
5. Markets, Outlooks & Risks Obvious mathematics will work in our favour:- Irrational over investment in Treasuries means yields of 1-3.5% depending on duration whereas investor pessimism produces current free cashflows yields for some high quality bonds and equities of 7% + , as well as likelihood
Slide 62: 5. Markets, Outlooks & Risks
5. Markets, Outlooks & Risks Significant short selling activity adds to business risks and some price volatility. >10% one day rise in financials from short covering post Bear Sterns illustrates. Rolling wave of ‘second order’ market business and economic effects e.g. from corrections to US, Irish,
Slide 63: 5. Markets, Outlooks & Risks
5. Markets, Outlooks & Risks Past Market cycles: Consider Berkshire 1973 Chairman’s letter “On the investment side of our insurance operation, we made substantial additional commitments in common stocks in 1973. We had significant unrealised depreciation – over $12 million – in our common stocks at
Slide 64: 5. Markets, Outlooks & Risks
5. Markets, Outlooks & Risks In 1973 and 1974, Charlie Munger’s limited partnership fell 31.9% and 31.5% respectively. Yet he achieved a 19.8% p.a. compound return for the 14 year life of the partnership till 1975 and subsequently made a major contribution to the Berkshire Hathaway multi year outper
Slide 65: 5. Markets, Outlooks & Risks
5. Markets, Outlooks & Risks Buffett said yes, he was well aware the world is in a mess… and there is population explosion, resource scarcity, nuclear proliferation. But, he went on, you can’t invest in anticipation of calamity; gold coins and art collections can’t protect you against Doomsday”. Loo
Slide 66: 5. Markets, Outlooks & Risks: Currencies
5. Markets, Outlooks & Risks Currencies We continue to provide Australian and New Zealand investors with diversification by currency, geography and company. We are now closer to fully invested in companies, many of which have operations in 30 or more countries. Our companies are amongst the most pro
Slide 67: 5. Markets, Outlooks & Risks: Market and Business Risks
5. Markets, Outlooks & Risks Market and Business Risks Assessment of risks remains a key focus. We became progressively more cautious about near term economic conditions through 2007. In 2008 it is clear that the US Fed and Government are doing everything possible to minimise the impact of a recessi
Slide 68: 6. Questions and Answers
6. Questions and Answers 68
Magellan Flagship Fund — Investor Presentation (April 2008) on 6ix