Betashares Global Shares Catholic Values ETF · ASX:GECV
Betashares Global Shares Catholic Values ETF — BetaShares — Investor Presentation (March 2016)
38 slides from Betashares Global Shares Catholic Values ETF's investor presentation, Mar 17, 2016
Slide 1: Gold shines amid global volatility
Gold shines amid global volatility Educational Webinar 17th March 2016
Slide 2: Important Information
Important Information The information contained in this document is general information only and does not constitute personal financial advice. It does not take into account any person’s financial objectives, situation or needs. It has been prepared by BetaShares Capital Limited (ABN 78 139 566 868,
Slide 3: Your presenters
Your presenters David Bassanese, BetaShares Chief Economist Formerly with: • AFR • Macquarie Bank • OECD • Treasury David is the author of two investment books, including Australia’s most comprehensive ‘Australian Guide to ETFs’ Justin Arzadon, Associate Director - Distribution Responsible for suppo
Slide 4: In this webinar…
In this webinar… 1. David Bassanese will provide a comprehensive market update, with a special focus on the prospects for Gold. 2. David will explain why investors may turn to Gold during market volatility and how it can be used inside an investment portfolio 3. Justin will show you how to gain expo
Slide 5: Contents
Contents • Update on the Economic Environment • Why investors may turn to gold during market volatility • BetaShares Gold Bullion ETF - Currency Hedged (QAU) 5 Confidential – may not be distributed without the consent of BetaShares Capital
Slide 6: Labour market: rolling over?
Labour market: rolling over? Std. dev. from LR avg. Labour Market Indicators 4 3.5 3 4.0 2 4.5 1 5.0 0 5.5 -1 6.0 -2 6.5 -3 7.0 ANZ Job Ads (% of lab. Force) [LHS] -4 7.5 NAB Employment Index [LHS] Unemployment Rate [RHS]-inverse axis -5 8.0 Aug-99 Aug-01 Aug-03 Aug-05 Aug-07 Aug-09 Aug-11 Aug-13 Au
Slide 7: Housing market a risk
Housing market a risk Job Ads and Housing 280 23000 260 21000 240 19000 220 17000 200 15000 180 13000 160 11000 140 9000 120 7000 100 5000 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 ANZ Job Ads [LHS] Home building approvals [RHS] Source: BetaShares, ABS Confidential
Slide 8: Iron ore rise may be unsustainable
Iron ore rise may be unsustainable Confidential – may not be distributed without the consent of BetaShares Capital
Slide 9: Global Market: Volatility trending higher
Global Market: Volatility trending higher Source: StockCharts.com Confidential – may not be distributed without the consent of BetaShares Capital
Slide 10: Global earnings dragging down prices
Global earnings dragging down prices MSCI World - Prices & Earnings Price Index EPS Index 1400 140 World MSCI (ex-Aust) Prices - hedged [LHS] 1200 Forward earnings [RHS] 120 1000 100 800 80 600 60 400 40 200 0 20 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Source: Bloomberg Confidential – may n
Slide 11: Earnings expectations under pressure
Earnings expectations under pressure MSCI World - Earnings Expectations Earnings per Share Index 140 Forward earnings 2015 135 2016 2017 130 125 120 115 110 105 100 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Source: Bloomberg Confidential – may not be distributed without the consent of BetaSha
Slide 12: Equity market valuations not compelling
Equity market valuations not compelling % MSCI World - Valuations 6 20 10-yr bond yield [LHS] Forward PE Ratio[RHS] 5 17 4 14 3 11 2 8 1 5 0 Margin [RHS] 2 -1 -1 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Source: BetaShares, Bloomberg Confidential – may not be distributed without the consent o
Slide 13: Inflation worries...
Inflation worries... Confidential – may not be distributed without the consent of BetaShares Capital
Slide 14: China's slowdown continues...
China’s slowdown continues... Confidential – may not be distributed without the consent of BetaShares Capital
Slide 15: Oil sector dragging on US economy
Oil sector dragging on US economy Confidential – may not be distributed without the consent of BetaShares Capital
Slide 16: Contents
Contents • Update on the Economic Environment • Why investors may turn to gold during market volatility • BetaShares Gold Bullion ETF - Currency Hedged (QAU) 16 Confidential – may not be distributed without the consent of BetaShares Capital
Slide 17: How to navigate volatile markets…
How to navigate volatile markets… Do nothing and “ride Try to time markets Reduce risk through out the storm” yourself defensive exposures Not ideal as volatility Very risky as Typical ‘safe-haven’ could get worse… investors tend to sell assets, such as gold sequencing risk low and buy high Confiden
Slide 18: Gold has recently broken higher…
Gold has recently broken higher… Source: StockCharts.com. Past performance is not an indicator of future performance Confidential – may not be distributed without the consent of BetaShares Capital
Slide 19: …consistent with its "safe haven" status
…consistent with its “safe haven” status Past performance is not an indicator of future performance Confidential – may not be distributed without the consent of BetaShares Capital
Slide 20: Central Banks getting negative
Central Banks getting negative Source: Thomson Reuters, Financial Times Confidential – may not be distributed without the consent of BetaShares Capital
Slide 21: QE is alive and well
QE is alive and well Source: Thomson Reuters, Financial Times Confidential – may not be distributed without the consent of BetaShares Capital
Slide 22: Bonds as a "safe haven" increasingly costly!
Bonds as a “safe haven” increasingly costly! Source: BIS Confidential – may not be distributed without the consent of BetaShares Capital
Slide 23: Gold can be a good source of portfolio diversification
Gold can be a good source of portfolio diversification Gold. Gold. World MSCI Correlation with Gold $US S&P/ASX 200 Correlation with Gold $US Annual returns, 2004-2015 40% Annual returns, 2004-2015 40% 30% 30% 20% 20% 10% 10% 0% 0% -10% -10% -20% -20% -30% -30% -40% -40% -60% -40% -20% 0% 20% 40% 60
Slide 24: Gold is uncorrelated with other major asset classes
Gold is uncorrelated with other major asset classes Correlation of Returns of Gold Bullion Spot Price (A$ Hedged) to Other Asset Classes: 5 years to February 2016 AUSTRALIAN US EQUITIES GLOBAL AUSTRALIAN GLOBAL EQUITIES (S&P 500 in EQUITIES BOND BONDS (S&P/ASX 200 US$) (MSCI World (Australian Gov. (
Slide 25: Gold: a handy addition to portfolio returns in recent years
Gold: a handy addition to portfolio returns in recent years Morningstar Balanced 93%, Gold (US$) 7% Source: Morningstar. Past performance is not an indicator of future performance Confidential – may not be distributed without the consent of BetaShares Capital
Slide 26: An inclusion of gold to a balanced portfolio would have also reduced downside risk
An inclusion of gold to a balanced portfolio would have also reduced downside risk Morningstar Balanced 93%, Gold (US$) 7% Source: Morningstar. Past performance is not an indicator of future performance Confidential – may not be distributed without the consent of BetaShares Capital
Slide 27: Contents
Contents • Update on the Economic Environment • Why investors may turn to gold during market volatility • BetaShares Gold Bullion ETF - Currency Hedged (QAU) 27 Confidential – may not be distributed without the consent of BetaShares Capital
Slide 28: Why obtain gold exposure through an ETF?
Why obtain gold exposure through an ETF? BETASHARES GOLD GOLD MINER PHYSICAL GOLD FUTURES BULLION ETF SHARES (COINS, BULLION) DIRECT GOLD YES – includes NO – stock market YES – Gold coins NO – effect of EXPOSURE currency hedge to and company often alloyed with futures ‘roll’ substantially specific r
Slide 29: BetaShares Gold Bullion ETF
BetaShares Gold Bullion ETF Product Name: BetaShares Gold Bullion ETF – Currency Hedged BetaShares Gold Bullion ETF - Currency Hedged aims to track the performance of the price of gold bullion, Investment Objective with a currency hedge against movements in the value of the U.S. dollar, before fees
Slide 30: Gold Bars backing fund held in secure vault at JP Morgan London
Gold Bars backing fund held in secure vault at JP Morgan London 30 Confidential – may not be distributed without the consent of BetaShares Capital
Slide 31: Difference between allocated and unallocated gold
Difference between allocated and unallocated gold Comparison of Allocated and Unallocated Gold ALLOCATED GOLD UNALLOCATED GOLD SEGREGATED FROM OTHER BULLION YES NO INDIVIDUALLY IDENTIFIED BARS YES NO ETF HAS RIGHTS TO SPECIFIC BULLION BARS YES NO PART OF BANKRUPTCY ESTATE IN EVENT OF NO YES BANKRUPT
Slide 32: Transparency – Actual Gold Bullion held updated daily on website
Transparency – Actual Gold Bullion held updated daily on website Details of actual gold bullion which is held by ETF located on BetaShares’ website • Number of bars held • Brand • Bar No • Shape • Assay • Weight (Gross and Fine) 32 Confidential – may not be distributed without the consent of BetaSha
Slide 33: Performance of Gold Bullion v. Gold Miners
Performance of Gold Bullion v. Gold Miners Gold Bullion Spot Price (A$ Hedged) v Gold Equities (ASX All Ords Gold Index): January 2007 – February 2016 350 Gold Bullion Spot Price (A$ Hedged) ASX All Ords Gold Index 300 250 200 7.5% p.a 150 100 -3.4% p.a 50 0 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09
Slide 34: Physically held coins and bars may not hold true value in all cases
Physically held coins and bars may not hold true value in all cases • When taken ‘off grid’ they are not “Good for delivery” • To re-enter grid, have to be re-melted and re- authenticated by member of LBMA • Remelting cost can be ~5- 10% of value(1) (1) Deutsche Bank 34 Confidential – may not be dis
Slide 35: Effect of Currency Hedging
Effect of Currency Hedging Gold Bullion Spot Price Performance A$ Hedged v Unhedged: 1 January 2009 – 31 December 2015 140 % Gold Spot Price (A$ Hedged): 2.7% p.a. 120 % Gold Spot Price (Unhedged): 2.1% p.a. 100 % 80% 60% 40% 20% 0% -20% Source: Bloomberg Past performance is not an indicator of futu
Slide 36: Currency hedge currently provides 'yield' pick up
Currency hedge currently provides ‘yield’ pick up • Currency hedge used in QAU uses ‘forwards’ • The mechanism of forwards is equivalent to borrowing U.S. dollars and using those dollars to purchase AUD • The Fund therefore benefits from any interest rate differential between the U.S. dollars and th
Slide 37: To summarise...
To summarise... 1. Market update: cautious risk-off environment – an environment where gold may be able to ‘shine’ 2. Why gold? – Current environment could continue to favour gold – Gold has strong diversification benefits for investment portfolios 3. BetaShares Gold Bullion ETF - Currency Hedged (A
Slide 38: FOR MORE INFORMATION
FOR MORE INFORMATION Website Visit www.betashares.com.au [email protected] Blog: www.betasharesblog.com.au Twitter: @betashares 1300 487 577 (within Australia) +61 2 9290 6888 (outside Australia) 38 Confidential – may not be distributed without the consent of BetaShares Capital