Perpetual Limited · ASX:PPT
Perpetual — Investor Presentation (October 2011)
29 slides from Perpetual's investor presentation, Oct 18, 2011
Slide 1: Perpetual's Diversified Funds: Portfolio positioning and Performance update
Perpetual’s Diversified Funds Portfolio positioning and Performance update Michael Blayney, Portfolio Manager Adam Curtis, Portfolio Specialist 18 October 2011
Slide 2: Our focus on asset allocation has delivered solid returns with less risk than peers
Our focus on asset allocation has delivered solid returns with less risk than peers We attribute Perpetual diversified funds’ results to: Thought leadership in asset allocation team led by Michael Blayney Continuous research emphasis in SAA to achieve portfolio objectives with less risk Disciplined
Slide 3: Performance
Performance 30 September 2011 PERFORMANCE VOLATILITY 1M % 3M % 6M % 1Y % 3Y % 5Y % 1Y % 3Y % 5Y % Perpetual Wholesale Conservative Growth-0.42 -0.70 0.14 4.04 4.43 4.15 1.94 4.03 4.05 Morningstar Aus Msec Moderate TR AUD -0.92 -1.45 -0.98 2.23 3.46 3.11 2.30 4.29 4.39 Perpetual Wholesale Balanced Gr
Slide 4: Balanced Growth Fund performance versus peers
Cumulative performance Performance versus Balanced Growthpeers toComparison Fund – Performance August as at 31 Net of Fees, 2011 August 31 August 2011 2011 Perpetual Wholesale Balanced Growth Fund Source: Perpetual, Mercer. Past performance is not indicative of future performance. 3
Slide 5: Conservative Growth Fund performance versus peers
Performance versus peers as at 31 August 2011 Perpetual Wholesale Conservative Growth Fund Source: Perpetual, Mercer. Past performance is not indicative of future performance. 4
Slide 6: Investment philosophy and process
Investment philosophy and process 5
Slide 7: Investment philosophy
Investment philosophy Focus on return drivers • We believe better portfolio construction is achieved by focusing on matters more than broad the fundamental drivers of returns from investments, rather than asset class definition broad definitions of asset classes themselves • We believe that markets
Slide 8: Investment process
Investment process Step 1: ■ Identify the risk and return expectations of the target investor in the portfolio Define portfolio objectives Step 2: ■ Understand the key drivers of risk and return from each asset class Understand the asset class building blocks with respect to risk premiums ■ Look bey
Slide 9: Investment process: Defining portfolio objectives
Investment process Defining portfolio objectives Investor risk profile Conservative Moderate Assertive Time horizon At least 2 years At least 3 years At least 5 years Low – moderate risks of Relatively low risk of capital Moderate risk of capital loss capital loss over shorter Risk expectations loss
Slide 10: Strategic asset allocation
Strategic asset allocation 9
Slide 11: Strategic asset allocation in the diversified funds
Strategic asset allocation in the diversified funds BGF (%) SAA DGF (%) SAA CGF (%) SAA Australian equities* (18% min) 28% (38% max) (11% min) 21% (31% max) (0% min) 11.5% (19% max) International equities 25% 19% 10.5% Emerging markets 3% 2% 1% Property 5% 5% 5% Infrastructure 4% - - Mezzanine debt
Slide 12: Active asset allocation
Active asset allocation 11
Slide 13: Active asset allocation - Structure
Active asset allocation - Structure Equities Bonds Cycle Value Technical Cycle Value Technical Equities position Bond position +100 most bullish +100 most bullish -100 most bearish -100 most bearish Incorporates into portfolio reflecting specified ranges around benchmark 12
Slide 14: Active asset allocation - Inputs
Active asset allocation - Inputs Earnings momentum Cycle Short term interest rates Equities Earnings / bond yield relationship Value Dividend yield Domestic growth Cycle Short term interest rates US long bond rates Bonds Aust 10 year real yield Value US / Aust 10 year real yield spread No reliance o
Slide 15: Tactical Asset Allocation
Tactical Asset Allocation Positions as at 4 October 2011 Current Equity Bonds Value +50 -40 Cycle Neutral +40 Technical Neutral +20 Total +50 +20 14
Slide 16: Recent active asset allocation positioning
Recent active asset allocation positioning Source: Bloomberg, Perpetual, as at 13 October 2011 15
Slide 17: Active equities positioning over the longer term
Active equities positioning over the longer term Our Equity TAA model has taken material under/overweight positions through the recent volatility to reduce risk and capitalise on attractive valuations ASX300 accumulation index and TAA equity model scores 5 years to September 2011 100 45000 80 60 400
Slide 18: Active bonds positioning over the longer term
Active bonds positioning over the longer term Accumulation Bond index and TAA bond model scores 5 years to September 2011 100 2750 80 2650 60 2550 Accumulation Bond Index TAA Bond score 40 2450 20 2350 0 2250 -20 2150 -40 2050 -60 1950 -80 1850 -100 1750 Aug-06 Jan-07 Jun-07 Oct-07 Mar-08 Jul-08 Dec
Slide 19: Enhancements
Enhancements 18
Slide 20: Continuous research for portfolio enhancement
Continuous research for portfolio enhancement There is a mandate to continue to enhance and develop the portfolios over time and therefore we are continually researching and evaluating opportunities. Research completed over the past few Current research Research agenda into the years future Refineme
Slide 21: Diversified Real Return Fund: the issue
Diversified Real Return Fund The issue - overconcentration of equity risk in diversified portfolios Typical Growth Portfolio Asset Allocation Typical Growth Portfolio- Risk Breakdown Cash (contribution to volatility) 5% International Australian Property Infrastructure fixed interest equities Interna
Slide 22: Diversified Real Return Fund: the solution
Diversified Real Return Fund The solution - risk budgeting approach for more efficient portfolio construction and allocation of risk Diversified Real Return Fund - Asset Diversified Real Return Fund - Risk Breakdown Allocation Commodities Alpha Cash & Fixed Emerging Sub investment 7% 2% Australian I
Slide 23: Diversified Real Return Fund: what it means for investors
Diversified Real Return Fund What does it mean for investors? ■ Further diversification of risk across many asset classes, to complement our existing alternatives exposure. ■ In particular further diversification of equity market risk. ■ Potential for better risk adjusted returns at a Balanced Fund
Slide 24: Diversified Real Return Fund cumulative growth versus ASX300
Diversified Real Return Fund Cumulative growth of Perpetual's Diversified Real Return Fund versus ASX300 on initial investment of $1,000 $1,100 $1,050 $1,000 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 $950 $900 DRRF (since inception) ASX300 $850 23
Slide 25: Summary
Summary ■ Perpetual’s diversified funds have consistently outperformed most of its peers with lower risk over time. ■ We remain focused on continuously improving our strategic asset allocation and maintaining a disciplined approach to active asset allocation to improve risk adjusted return. ■ The hi
Slide 26: Appendix
Appendix 25
Slide 27: Rolling 3-year performance: Balanced Growth Fund
Rolling 3-year performance PERPETUAL WHOLESALE BALANCED GROWTH FUND [ Jun 11 ] Australian Global Asset Portfolio Median 3Y Return 3Y Risk Excess Excess Excess Equities 1 Equities 1 Allocation2 Return 3 Manager 4 Quartile Quartile 30-Jun-01 18.9% 5.8% 10.0% 1.7% 0.4% 12.1% 9.7% 2.4% 1 2 30-Jun-02 13.
Slide 28: Rolling 3-year performance: Conservative Growth Fund
Rolling 3-year performance PERPETUAL WHOLESALE CONSERVATIVE GROWTH FUND [ Jun 11 ] Australian Global Asset Portfolio Median 3Y Return 3Y Risk Excess Excess Excess Equities 1 Equities 1 Allocation2 Return 3 Manager 4 Quartile Quartile 30-Jun-07 26.5% 0.1% 9.2% 0.2% -0.3% 9.7% 9.5% 0.1% 2 2 30-Jun-08
Slide 29: Important note
Important note This presentation has been prepared by Perpetual Investment Management Limited (PIML) ABN 18 000 866 535, AFSL 234426 for financial advisers only. It is general information only and is not intended to provide you with financial advice. To the extent permitted by law, no liability is a