Voya Financial, Inc. · NYSE:VOYA
Voya Financial — Investor Presentation (March 2021)
37 slides from Voya Financial's investor presentation, March 2021
Slide 1: Voya Global Perspectives
March 2021 Voya Global Perspectives Market. Insights. Opportunities.® CN1483104_0122 20210119-1483104-4475878 Voya Global Perspectives®
Slide 2: 2021 Forecast
2021 Forecast 20210119-1483104-4475878 Voya Global Perspectives® 2
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. Source: Refinitiv – Thomson Reuters and FactSet, Voya Investment Management. Earnings per share (EPS) is the portion of a company’s profit allocated to each outstanding share of common
Slide 4: Broadening Manufacturing
Broadening Manufacturing Global Manufacturing PMIs U.S. Industrial Production 74 120 70 64.70 U.S. 66 62.49 Euro 110 62 Expansionary (>50) 58 Index Level 54 100 Index Level 51.90 China 50 46 90 U.S. recessionary Contractionary (<50) 42 periods 38 80 34 30 70 04/18 10/18 04/19 10/19 04/20 10/20 04/21
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. 600 561.69 550 $ Billions per month 500 450 400 U.S. Retail Sales 350 2011 2013 2016 2018 2021 Source: FactSet. U.S. retail sales as of 2/26/21. 20210119-1483104-4475878 Voya Global Perspectiv
Slide 6: Diversification
Diversification Global effective diversification has beaten the S&P 500 over a long period of time Source: FactSet, FTSE NAREIT, Voya Investment Management. The Overall Average model allocation includes 10 asset classes, equally weighted: S&P 500, S&P 400 Midcap, S&P 600 Smallcap, MSCI U.S. REIT Ind
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 20 years shows that active management may add value especially in market downturns. Tactical G r o Strategic w t h S&P 500 Index $ 1 Market Fundamentals S&P 500 Earnings Growth Tactical Signal Positi
Slide 8: Europe Lags U.S. Markets
Europe 20 Years Europe Lags U.S. Markets 4.0 S&P 500 MSCI EAFE S&P 500 Index 3.5 Bloomberg Barclays Global Aggregate Bloomberg Barclays US Aggregate Growth of $ 3.0 2.5 MSCI EAFE index 2.0 1.5 Barclays U.S. Aggregate Barclays Global Aggregate 1.0 0.5 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 Data as o
Slide 9: The Fed
The Fed The U.S. Federal Reserve and other Central Banks are again expanding their balance sheets. Fed Balance Sheet ($) 9,000 ECB Balance Sheet (€) BoJ Balance Sheet (¥) Assets in Local Currency - Millions 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2007 2008 2009 2010 2011 2012 2013 2014 201
Slide 10: Global Growth
Global Growth World economic growth has doubled from 2003 to 2018. Source: International Monetary Fund (IMF) as of 2018. Note: Advanced economies comprises 36 countries; developing economies comprises 153 countries. 20210119-1483104-4475878 Voya Global Perspectives® 10
Slide 11: Housing
Housing 20 260 S&P Case Shiller Housing Index 245 15 240 10 220 Case-Shiller 1-Year Case-Shiller % change % (LHS) 5 200 Index Level 0 180 -5 160 -10 Case-Shiller Level (RHS) 140 -15 120 -20 -25 100 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 Source: FactSet, S&/P Case-Shiller as of 1/29/2
Slide 12: Inflation
Inflation 3.5 3 2.5 2.60 Headline CPI Y/Y Percent (%) 2 1.60 Core PCE Y/Y 1.5 1.41 Core CPI Y/Y 1 0.5 0 2017 2018 2019 2020 2021 Source: FactSet, Inflation as of 3/31/2021. 20210119-1483104-4475878 Voya Global Perspectives® 12
Slide 13: Jobs
Jobs The unemployment rate has slowly improved in line with economic growth. R²: 0.28 Correlation: 0.53 Unemployment Rate, U-3, SA, Percent - United States Initial Claims For Unemployment Insurance Under State Programs, 4-Week, SA, Persons - United States 16% 6,000,000 14% 5,000,000 New Weekly Claim
Slide 14: Dow Jones Industrials (price only — years)
Dow Jones Industrials (price only — 100 years) It is not unusual for stocks to have prolonged periods of flat returns. 40,000 30,000 20,000 10,000 Q1 2020 Global 5,000 Pandemic 4,000 3,000 Log 2,000 Tech Wreck Great 2000-2002 Recession 1,000 2007-2009 500 400 OPEC Oil Crisis 300 200 100 Pearl Harbor
Slide 15: Index Total Returns
Index Total Returns Data as of 12/31/20. Large-cap companies are typically firms with a market value of $10 billion or more. Investments in large-cap stocks may be considered more conservative than investments in small-cap or mid-cap stocks, potentially posing less risk in exchange for less aggressi
Slide 16: The Fed Model
The Fed Model Stock and Bond comparison translated into comparable valuations 16 Earnings Yield (solid = forward, dotted = trailing) 14 U.S. Treasury Yield (10 year) 12 Equivalent to 10 P/E* of 22 Percent (%) EPS Yield 4.55 % 8 Equivalent to 6 P/E* of 62 4 T-Yield 1.62% 2 0 1970 1975 1980 1984 1990
Slide 17: U.S. Consumer Confidence
U.S. Consumer Confidence 200 180 160 Present 140 Index Level 120 100 Total Index 80 60 40 U.S. Retail Sales 20 0 2012 2014 2016 2018 2020 20210119-1483104-4475878 Source: Factset. Consumer Confidence as of 3/31/21, Retail sales as of 3/31/21 Voya Global Perspectives® 17
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. 4.0 1,800 (INDEX) Russell Mid Cap - Price 3.5 (INDEX) Russell 1000 - Price 1,600 (INDEX) Russell 2000 - Price Mid Cap Large Cap Russell 1000 Growth Index 3.0 1,400 2.5 1,
Slide 19: The Fed
The Fed Fed Funds Target Rate 10 8 Percent (%) 6 4 Average 2 0 0.25 1999 2002 2006 2009 2012 2015 2018 2021 Source: FactSet, Fed Funds Target Rate, data as of 3/31/2021. Average Fed Funds Rate is average since 1988. 20210119-1483104-4475878 Voya Global Perspectives® 19
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 11/20/08 = 80.9 Lehman Crisis China Coronavirus 87 Currency 12/31/08 = 40.0 Euro Crisis Devaluation 40 4/01/21 = 17.33 U.S. Credit Downgrade 35 Index Level 30 Brexit 25 Histo
Slide 21: Bond and Loan Returns
Bond and Loan Returns Long-term U.S. Treasurys have been winners in periods of uncertainty. Data as of 3/31/21. Investment Grade bonds are bonds that have an investment grade rating of Baa or higher from Moody's Investors Service, a rating of BBB or higher from Standard & Poor's or both and typicall
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 3/31/2021 Source: FactSet. Past performance is no guarantee of future results. An investment cannot be made in an index. Please review important disclosur
Slide 23: Growth and Reflation
Growth & Reflation Growth and Inflation Growth and Reflation The 10-year U.S. Treasury yield historically tracks real U.S. GDP and inflation. 40 30 20 10 4.30 Percent (%) 1.74 0 1.30 -10 -20 10-Year Treasury Yield Real U.S. GDP -30 Inflation – Core CPI Y/Y -40 1975 1977 1979 1981 1983 1985 1987 1989
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 TED Spread (Libor – 3-month Treasury) High Yield Spreads 1,000 4 900 Lehman crisis 3 800 700 2 Basis Points Percent (%) 600 500 1 400 0.17 0 300 200 -1 2016 2017 2018 2019 2020 1990 1995 1999
Slide 25: U.S. Export, Import Growth (YoY % Change)
U.S. Export, Import Growth (YoY % Change) U.S. trade is highly dependent on global economic growth. 30 Recession 20 10 0 % -10 -20 -30 2001 2003 2005 2007 2010 2012 2014 2016 2019 2021 (% 1YR) Exports (% 1YR) Imports Source: FactSet. Data as of 3/31/21. 20210119-1483104-4475878 Voya Global Perspecti
Slide 26: International Economics
International Economics The “Big 3” dominate the global economy while the U.S. and China is putting distance on Europe Source: FactSet. Data are most recent available as of 12/31/20. 20210119-1483104-4475878 Voya Global Perspectives® 26
Slide 27: Savings Rates and Household Net Worth
Savings Rates and Household Net Worth Household net worth and savings rate remains high. Savings Rate Household Net Worth 30 3 month average, % of disposable income 140 130 130.36 25 120 110 Household wealth has rebounded since the 20 100 financial crisis $ trillions 90 15 15.67 80 70 60 10 50 40 5
Slide 28: Commodities Prices
Commodities Prices Gold actually sells for less today in real — inflation-adjusted — terms than in 1980. $2,400 $/oz. $10,000 $/ton 600 COPPER $/ton $2,000 550 CRB Index 500 $1,600 $8,000 $1,200 450 Economy GOLD 400 $800 Nominal Price/oz. GOLD Real $6,000 Price/oz. 350 $400 300 $0 1976 1984 1991 199
Slide 29: Oil Price and Intensity
Oil Price and Intensity Crude oil prices are a good indicator of global demand with too high and too low both ominous 200 1,000 150 Barrels per $1 Million of GDP 800 Crude Oil (NYM $/billion) 100 Oil Intensity Price $ per Barrel 61.56 600 50 400 0 30 year average = $43.4/barrel 60% less oil is requi
Slide 30: U.S. Government Debt and Deficit
U.S. Government Debt and Deficit U.S. Government Debt Debt Levels 30,000,000 150 129.19% $28.1 Trillion 25,000,000 120 20,000,000 % of GDP $ Trillions 90 15,000,000 Debt 10,000,000 60 5,000,000 2005 2008 2011 2015 2018 2021 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 Source: FactSet.
Slide 31: Corporate Income Tax Rates
Corporate Income Tax Rates U.S. corporate income taxes were slashed in 2017 improving its competitive advantage. Percent (%) Source: Organization for Economic Cooperation and Development. Data as of 2020. 20210119-1483104-4475878 Voya Global Perspectives® 31
Slide 32: Asset Class Returns
Asset Class Returns Asset class returns vary widely over time, making allocation decisions difficult. 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
Slide 33: 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 34: Index Definitions
Index Definitions Bloomberg Barclays U.S. Aggregate Bond Index is composed of U.S. FTSE NAREIT U.S. Real Estate Index presents comprehensive REIT securities in Treasury, Government-Related, Corporate and Securitized sectors performance across the U.S. economy, including all commercial investment tha
Slide 35: Index Definitions
Index Definitions Asset classes are represented by the following indexes: S&P SmallCap 600 Index covers approximately 3% of the domestic equities market and is designed to represent a portfolio of small companies that are Bloomberg Barclays U.S. Corporate Bond Index is a component of the investable
Slide 36: Index Definitions
Index Definitions MSCI U.S. REIT Index is a free float-adjusted market capitalization weighted Russell Midcap Value Index measures the performance of the mid-cap value index comprised of equity REITs that generate a majority of their revenue and segment of the U.S. equity market including Russell Mi
Slide 37: Important Disclosures
Important Disclosures This information is proprietary and cannot be reproduced or distributed. Certain The views and judgments expressed are those of Voya Investment information may be received from sources Voya Investment Management Management. They are subject to change at any time. These views do