Date post: | 19-Oct-2014 |
Category: |
Economy & Finance |
View: | 1,195 times |
Download: | 0 times |
May 2010
Global Growth Equities – Seeking Inflection Points
Sheila Hartnett-Devlin, CFAVice PresidentClient Portfolio Manager
This promotion has been approved with limitations, in accordance with Section 21 of the Financial Services and Markets Act, by American Century Investment Management (UK) Limited, which is authorised and regulated by the Financial Services Authority. This promotion is directed at persons having professional experience of participating in unregulated schemes and units to which the communication relates are available only to such persons. Persons who do not have professional experience in participating in unregulated schemes should not rely on it.
American Century Investment Management (UK) Limited is authorised and regulated by the Financial Services Authority.American Century Investment Management (UK) Limited is registered in England. Registered number: 06520426.Registered office: 1st Floor, Pellipar House, 9 Cloak Lane, London EC4R 2RU
©2010 American Century Proprietary Holdings, Inc. All rights reserved.
American Century Investments
Alex TedderVice PresidentSenior Portfolio Manager
American Century Investments
0737
2
American Century Investments - A Foundation for Success
• Independent and privately-controlled ownership structure► Decision-making aligns with clients’ interests
• Focused exclusively on investment management► All resources are directed to adding value for our clients
• Fundamentally-driven, risk-adjusted performance► Alpha is derived through security selection
• Delivering results to our clients has a wider impact ► Through our ownership structure, more than 40% of our
profits support the Stowers Institute for Medical Research.
► This drives a values-based culture that directly benefits our clients.
*As of 12/05/2010
Focused on performance for over 50 years
The Stowers Institute for Medical Research
Firm Asset Distribution(Total: $90.7bn)
US Growth26%
US Value21%
US Core4%
Other2%
Asset Allocation
5%
Fixed Income32%
Global / Intl Growth10%
American Century Investments
0737
3
Global GrowthExperienced Investment Team with a Global Focus
Mark KopinskiChief Investment Officer
Portfolio Managers Alex Tedder
Rajesh Gandhi, CFA
International Growth
Portfolio Managers Keith Creveling, CFA
Brent Puff
Global Growth
Portfolio Managers Mark KopinskiBrian Brady
Intl. Small-Mid Cap
Portfolio Managers Mark KopinskiTrevor Gurwich
International Small Cap
Portfolio Managers Patricia Ribeiro
Anthony Han, CFA
Emerging Markets
Geoffrey Burger, CFA
Quantitative Analyst
Bernard Chua, CFASheila Hartnett-Devlin, CFA
Client Portfolio Managers
Chris SpurlockShari Freifeld
Jessica CarballalGeorge Nakos
Int’l Equity Trading
Investment Analysts
Christine Chien Jim Zhao, CFA Taras ShumeldaCharlie Kime Vital Magnin, CFA Helen O’Donnell
Ted Harlan, CFA Emily Smith Joost VosHannah Chiang Joe Kong Indraneel Das
Pratik Patel
Average years of experience: 16.6 yearsLanguages / dialects spoken: 20
American Century Investments
0737
4
Investing With a Time-Tested Growth Philosophy
We believe that accelerating growth in revenues and earnings results in significant potential for stock price appreciation.
We focus on inflection points in companies’ fundamentals
Our process is designed to uncover stocks that outperform as earnings growth accelerates, market expectations rise and multiples expand
A company’s absolute level of growth is not as important as . . .
TIME
20%
25%
20%
the direction of its growth.
9%6%
15%
-2%
TIME
American Century Investments
0737
5
Global GrowthAchieving Repeatability
Identify companies that exhibit accelerating growth and improving fundamentals
Deliver a portfolio consistent with established goals and guidelinesMitigate risks when an investment thesis deteriorates
Determine whether acceleration is genuine and sustainable
Focus equally on buy/hold and sell/trim decisionsMonitor investment risks
Idea Generation
Fundamental Analysis
Portfolio Construction
Continuous Management
InvestmentUniverse
Portfolio
1
2
3
90 - 110 companies
Market capitalization > $3BnSufficient trading liquidity
American Century Investments
0737
01020304050
03/0
2/20
09
03/2
6/20
09
04/2
2/20
09
05/1
8/20
09
06/1
2/20
09
07/0
9/20
09
08/0
4/20
09
08/2
8/20
09
09/2
4/20
09
10/2
0/20
09
11/1
3/20
09
12/1
0/20
09
01/0
7/20
10
02/0
3/20
10
03/0
2/20
10
03/2
6/20
10
Shar
es in
Tho
usan
ds
$70
$90
$110
$130
$150
$170
$190
$210
$230
$250
$270
0.0
0.5
1.0
1.5
2.0
2.5
Weig
ht in
Per
cent
Priceline.com Weight Held in Global Growth vs. Daily Closing Price2/28/2009 - 3/31/2010
WEIGHT PRICE
6
Global GrowthBuying Companies At Inflection Points
References to specific securities are for illustrative purposes only, and are not intended as recommendations to purchase or sell securities. Opinions and estimates offered constitute our judgment and along with other portfolio data, are subject to change without notice.
Priceline.com (USA)
Source: FactSetData as of 3/31/2010
Priceline.com Incorporated
• Global online travel company• Offers hotel reservations in over 75 countries
Acceleration Identification• Met with management during the summer of 2008• Observed continued acceleration of volume growth in
their Q4 2008 results• Position initiated having verified case with subsequent
meeting with management
Fundamental Analysis – The case for sustainability• Standout value proposition• Market share gainer. The company is able to
capitalize on fragmented hotel booking market in its core market
• Secular growth due to low penetration rate of online travel booking in its core markets
• Cost structure is variable• Beneficiary of ‘trade down” effect
Portfolio Construction• We initiated a position in March 2009. We have
added to our position as earnings confirm the company’s ability to sustain growth in a tough market
American Century Investments
0737
7
References to specific securities are for illustrative purposes only, and are not intended as recommendations to purchase or sell securities. Opinions and estimates offered constitute our judgment and along with other portfolio data, are subject to change without notice.
Global GrowthSelling to Capture Results, Mitigate Risks
Munich RE• Diversified financial firm involved in insurance
underwriting, re-insurance and asset management• World’s largest re-insurer
Fundamental Analysis – The original case for sustainability• Beneficiary of market dislocation due to the exit of
AIG from the re-insurance market place and the falling level of available capital
• Beneficiary of increasing premiums
Decelerating Growth• On August 4, 2009 second quarter earnings
disappointed expectations• Claims had started to accelerate providing a drag on
margins and earnings• The company had announced higher premiums during
the July renewal period but it was a deceleration from the rate increase achieved during the April renewals (4% increase vs. 7% the prior period)
Portfolio Construction• The second quarter earnings suggested that
sustained improvement would be more difficult. After further review, we decided to exit the position entirely during the first weeks in August
01020304050
10/0
1/20
08
10/2
9/20
08
11/2
6/20
08
12/2
6/20
08
01/2
7/20
09
02/2
5/20
09
03/2
5/20
09
04/2
3/20
09
05/2
1/20
09
06/1
9/20
09
07/2
0/20
09
08/1
7/20
09Shar
es in
Tho
usan
ds
Munich Re Weight Held in Global Growth vs. Daily Closing Price9/30/2008 - 8/31/2009
0.0
0.5
1.0
1.5
2.0
2.5
Weig
ht in
Per
cent
$100
$110
$120
$130
$140
$150
$160
$170WEIGHT PRICE
Munich Re (Germany)
Source: FactSetData as of 8/31/2009
American Century Investments
0737
8
Global GrowthA Record of Delivering Consistent Alpha
Data as of 3/31/2010. Portfolio performance is gross of fees.Source: MSCI, Inc.
Positive alpha in 60 out of 60 rolling three-year periods (100%)
Last five years: average annualized three-year alpha in all periods was (3.6%)
Since inception: average annualized three-year alpha in all periods was (4.55%)
Positive alpha in 55 out of 60 rolling three-year periods (92%)
Last five years: average annualized three-year alpha in all periods was (2.97%)
Since inception: average annualized three-year alpha in all periods was (3.46%)
Global Growth Composite vs MSCI World Growth Index
0%
1%
2%
3%
4%
5%
6%
7%
Apr-05 Apr-06 Apr-07 Apr-08 Apr-09
Rollin
g 3-Y
ear A
nnua
lized
Ca
sh-A
djus
ted A
lpha
Global Growth Com posite vs MSCI World Index
-1%
0%
1%
2%
3%
4%
5%
6%
7%
Apr-05 Apr-06 Apr-07 Apr-08 Apr-09
Rolli
ng 3-
Year
Ann
ualiz
ed
Cash
-Adj
uste
d Al
pha
American Century Investments
0737
9
Complementing a Global Core or Value Strategy
More than $428 billion institutional assets* are invested in global equity strategies– Nearly 75% of those assets are represented by Core or Value managers
– Largest five core or value managers represent 25% of global institutional assets
As a complement to a core or value strategy, our Global Growth portfolio provides an opportunity to add alpha, while dampening overall volatility in a global portfolio
*As reported to eVestment Analytics for 03/31/2010.
Manager 1 (Core)
Manager 2 (Core)
Manager 3 (Value)
Manager 4 (Core)
Manager 5 (Core)
-0.07 0.40 -0.10 -0.09 -0.15
Data Five Years as of 3/31/2010Correlation of excess vs. MSCI World IndexSource: eVestment Analytics
American Century Global Growth Correlation of Excess Returns with five largest institutional global core or value managers by assets
American Century Investments
0737
10
Appendix
American Century Investments
0737
11
Global GrowthPortfolio Allocations
SectorInformation Technology 18.71 % 12.09 %
Consumer Discretionary 12.35 9.68
Industrials 12.37 10.83
Materials 8.69 7.46
Health Care 10.72 9.81
Consumer Staples 9.05 10.13
Energy 9.32 10.47
Telecommunication Services 1.61 4.10
Financials 17.19 21.15
Utilities 0.00 4.27
Data as of 3/31/2010Source: FactSet
MSCIRelative Weight (%) Growth
GlobalWorld Index
6.62
2.67
1.54
1.23
0.91
-1.08
-1.15
-2.49
-3.96
-4.27
-15 -5 5 15
Weighted Average Market Capitalization $53.1 B $63.4 B $56.1 B
Median Market Capitalization $25.8 B $7.3 B $7.4 B
P/E Ratio, Forecasted 1-Year 16.7x 15.1x 17.4x
EPS Growth, Forecasted 1-Year 25.6% 22.7% 24.3%
ROE, Historical 1-Year 19.2% 15.1% 18.2%
Dividend Yield 1.5% 2.4% 1.7%
Number of Holdings 93 1645 1001
Turnover 1-Year 107% N/A N/A
Data as of 3/31/2010Source: FactSet
MSCI WorldGrowth Index
GlobalGrowth
MSCI WorldIndex
Global Growth
Company Country Industry
Apple Inc United States Computers & Peripherals 2.84
BHP Billiton Ltd Australia Metals & Mining 2.67
American Express Co United States Consumer Finance 2.40
Cisco Systems Inc United States Communications Equipment 2.21
Occidental Petroleum Corp United States Oil, Gas & Consumable Fuels 2.05
Danaher Corp United States Machinery 2.01
ASML Holding NV Netherlands Semiconductors & Semiconductor Equipment 1.97
Compass Group PLC United Kingdom Hotels, Restaurants & Leisure 1.95
EMC Corp/Massachusetts United States Computers & Peripherals 1.71
Goldman Sachs Group Inc United States Capital Markets 1.71
21.51 %Data as of 3/31/2010
% of AssetsRegion
Emerging Markets 6.53 % 0.00 %
Europe 28.77 29.87
North America 52.02 54.16
Asia 12.69 15.97
Data as of 3/31/2010Source: FactSet
MSCIRelative Weight (%) World IndexGrowth
Global
-3.28
-2.14
-1.11
6.53
-12.0 -6.0 0.0 6.0 12.0
1
2
3
4
American Century Investments
0737
12
Global GrowthDemonstrating Strength of Philosophy and Process
The supplemental information presented in this presentation complements the compliant composite presentation which can be found in the Appendix.Composite performance is shown gross of fees. Inception of composite is January 1, 1999.
Data as of 3/31/2010Source: MSCI Inc.
Return (%)
2.20
8.77
47.33
-2.14
6.86
1.393.247.44
2.89-0.03
3.14
9.30
49.39
-3.36
3.64
52.37
-5.41-2.50-10
0
10
20
30
40
50
60
1Q 2010 6Months 1 Year 3 Year 5 Year 10 Year
Global Growth CompositeMSCI WorldMSCI World Growth
Annualized Returns
American Century Investments
0737
13
Global GrowthDemonstrating Strength of Philosophy and Process
The supplemental information presented in this presentation complements the compliant composite presentation which can be found in the Appendix.Composite performance is shown gross of fees. Inception of composite is January 1, 1999.
ValueAdded 10.14 -0.35 12.64 -1.20
Data as of 04/30/2010Source: MSCI Inc.
4.26
19.63 19.7221.68
-41.91
34.25
3.01
9.49
20.07
9.04
-40.71
29.99
3.25
9.40
15.16 14.76
-41.13
33.27
3.36
-50
-40
-30
-20
-10
0
10
20
30
40
2005 2006 2007 2008 2009 YTD(04/30/2010)
Return (%)
Global Growth CompositeMSCI World IndexMSCI World Growth Index
-0.24
American Century Investments
0737
14
Global GrowthRisk-Adjusted Performance vs. Global Large Cap Growth Peers
Data as of 3/31/2010. Number of managers in universe was 26. Calculated using gross of fee performance.Source: eVestment Analytics
American Century Inv Global Growth Equity
0%
25%
Median
75%
100%Std Dev iation Sharpe Alpha Tracking Error Inf o Ratio
Perc
entil
e R
ank
eA Global Large Cap Growth Equity UniverseeA Global Large Cap Growth Equity UniverseBenchmark: MSCI World-ND, Citigroup 3-Month T-BillBenchmark: MSCI World-ND, Citigroup 3-Month T-Bill
Five Years Ending March-31-2010Five Years Ending March-31-2010
Firm/ProductStd
Deviation RankSharpeRatio Rank Alpha Rank
Tracking Error Rank
Information Ratio Rank
American Century Inv Global Grow th Equity 18.25 72 0.22 28 4.02 24 4.97 68 0.80 32
Median 19.41 0.18 3.19 5.74 0.5
# of Managers 26 26 26 26 26
American Century Investments
0737
15
Global GrowthRisk-Adjusted Statistics vs. Global Large Cap Peers
Data as of 3/31/2010. Number of managers in universe was 121. Calculated using gross of fee performance.Source: eVestment Analytics
American Century Inv Global Growth Equity
0%
25%
Median
75%
100%Std Dev iation Sharpe Alpha Tracking Error Inf o Ratio
Perc
entil
e R
ank
eA Global Large Cap Equity UniverseeA Global Large Cap Equity UniverseBenchmark: MSCI World-ND, Citigroup 3-Month T-BillBenchmark: MSCI World-ND, Citigroup 3-Month T-Bill
Five Years Ending March-31-2010Five Years Ending March-31-2010
Firm/ProductStd
Deviation RankSharpeRatio Rank Alpha Rank
Tracking Error Rank
Information Ratio Rank
American Century Inv Global Grow th Equity 18.25 52 0.22 18 4.02 18 4.97 39 0.80 22
Median 18.3 0.1 1.67 4.29 0.47
# of Managers 121 121 121 121 121
American Century Investments
0737
16
Global GrowthComposite Performance and Fee Schedule December 31, 2009
YearGross Total Return (%)
Net Total Return (%)
Benchmark Return (%)
Number of Portfolios
Non-Fee Paying Portfolios (%)
Composite Dispersion (%)
Composite Assets
(in 000s)Total Firm Assets
(in 000s)2000 -4.54 -5.77 -13.18 Five or Fewer 0.00 N/A $459,240 $101,105,1432001 -24.67 -25.64 -16.82 Five or Fewer 0.00 N/A $279,089 $88,616,1692002 -19.21 -20.25 -19.89 Five or Fewer 0.00 N/A $204,749 $72,080,2282003 36.30 34.54 33.11 Five or Fewer 0.00 N/A $272,032 $87,392,8372004 16.57 15.10 14.72 Five or Fewer 0.00 N/A $322,296 $97,855,8532005 19.63 18.10 9.49 Five or Fewer 0.00 N/A $407,203 $100,634,1742006 19.72 18.23 20.07 Five or Fewer 0.00 N/A $566,549 $102,859,4182007 21.68 20.41 9.04 Five or Fewer 0.00 N/A $878,986 $102,528,5802008 -41.91 -42.34 -40.71 9 0.40 0.09 $1,374,067 $70,216,8752009 34.25 33.59 29.99 11 0.30 0.44 $2,722,892 $86,002,779
Separate AccountFirst $25 million: 75 bpsNext $25 million: 65 bpsNext $50 million: 60 bpsOver $100 million: 55 bps
The benchmark for this composite is the MSCI World Free Index.American Century Investment Management, Inc. has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®). American Century Investment Management, Inc. has been verified on a firm-wide basis from January 1, 1992 to December 31, 2008 by an independent verifier.
The following fees represent composite performance based on an institutional separate account fund. They are not a reflection of the actual fees for subadvised funds.
American Century Investments
0737
17
For purposes of compliance with the Global Investment Performance Standards (“GIPS®
standards”), the Firm is defined as American Century Investment Management, Inc. (“ACIM” or “the Firm”). Effective December 31, 2009, this firm definition has been updated to exclude American Century Global Investment Management, Inc. (“ACGIM”), and American Century Services, LLC (“ACS”) as these are subsidiaries of ACIM and thus represented under ACIM.
Global Growth Equity composite includes portfolios that invest in the equity of large capitalization companies both domestically and abroad that are demonstrating improving growth rates.
Performance results are expressed and calculated in U.S. dollars. The return may increase or decrease as a result of currency fluctuations.
Consultants and investors supplied with these performance results are advised to use this data in accordance with guidelines issued by the United States Securities and Exchange Commission. Past performance may not be indicative of future returns. The value of any investment may rise or fall over time. Principal is not guaranteed and investors may receive less than the full amount of principal invested at the time of redemption if asset values have declined.
The Composite’s dispersion of annual returns is measured by the asset-weighted standard deviation of individual portfolio annual returns. Only portfolios that have been managed within the Composite for the full year are included in the asset-weighted standard deviation calculation. Dispersion is not calculated for composites that have five or fewer portfolios for the full calendar year.
The performance results for this composite are net of foreign income tax withholding and include the effect of foreign currency where applicable. The foreign income tax withholding rate varies by country and is recorded at the tax rate specified by the country’s tax treaty. The composite is not a sub sector of a larger portfolio. The benchmark for this composite is the MSCI World Free Index. The performance results for the MSCI World Free Index are net of foreign income tax withholding. The assumed tax rate varies form 0% to 35%, using the perspective of a Luxembourg holding company.
The Firm utilizes a time-weighted total rate of return methodology to calculate performance. All portfolios are valued daily based on principal market values plus accrued income. The market value of an account is the sum of a portfolio’s total assets, including accrued interest and dividends, cash and cash equivalents, short-term investments, and securities valued at current market prices. Security transactions are recognized based on trade-date accounting. Interest is recorded on an accrual basis and dividends are recorded on the ex-dividend date. Portfolio returns are calculated monthly. Gross-of-fee returns are calculated before management fees and after all trading costs. Net-of-fee returns are calculated after all trading costs, management fees, custody fees, distribution and services fees, as applicable. Monthly management fees are based on the prorated annual management fee schedule net of reimbursements. The composite returns are calculated monthly by weighting each account’s monthly return by its beginning market value as a percent of the composite’s total beginning market value. Quarterly and annual composite returns are calculated by geometrically linking the monthly composite returns. Additional information regarding policies for calculating and reporting returns is available upon request.
Benchmark return information is provided for comparative and referential purposes only. Benchmark information is provided by third party sources, and is considered to be accurate.
The Firm established $5 million minimum portfolio size for inclusion in the composite.
New portfolios are generally included in the composite rate of return calculations at the beginning of the month immediately following the date they were funded. If a portfolio’s funding occurs after the 21st day of a month, the portfolio is included in performance reporting as of the first day of the second full month after opening. Portfolios that change investment strategies are transferred between composites in the first full monthly reporting period the portfolios are managed under the new style. Terminated portfolios are included in the Composite rate of return calculations through the completion of their last full month under management.
There has been no material change in personnel responsible for investment management. Leverage is not utilized in this composite. Futures (and currency forwards and futures, where applicable or appropriate) are occasionally used to manage portfolio risk. Other derivative instruments may be used, as allowed, as part of the investment strategy.
The creation date for this composite is June 2000.
A complete list and description of the Firm’s composites is available upon request.
FOR INSTITUTIONAL USE ONLY©2010 American Century Proprietary Holdings, Inc. All rights reserved.
Global GrowthPerformance Disclosures December 31, 2009
American Century Investments
0737
18
Important Notes for Non-U.S. Investors
• Investors in the United Kingdom: This promotion has been approved with limitations, in accordance with Section 21 of the Financial Services and Markets Act, by American Century Investment Management (UK) Limited, which is authorised and regulated by the Financial Services Authority. This promotion is directed at persons having professional experience of participating in unregulated schemes and units to which the communication relates are available only to such persons. Persons who do not have professional experience in participating in unregulated schemes should not rely on it.
American Century Investment Management (UK) Limited is registered in England. Registered number: 06520426.Registered office: 1st Floor, Pellipar House, 9 Cloak Lane, London EC4R 2RU
• Investors in Denmark: American Century Investment Management, Inc. and American Century Global Investment Management, Inc. are not registered under the Danish Financial Business Act.
• Investors in Finland: This presentation has been prepared for private information purposes of interested investors only. It may not be used for and shall not be deemed a public offering of securities. This product cannot be offered or sold in Finland by means of any other document to any persons other than investors that qualify as "Professional Investors" as defined by the Finnish Mutual Funds Act (Sijoitursrahastolaki, 48/1999), as amended.
• Investors in Australia: American Century Investment Management, Inc. and American Century Global Investment Management, Inc. are exempt from the requirement to hold an Australian financial services licence under the Corporations Act in respect of the financial servicesthey will provide and it is regulated by the SEC under US laws, which differ from Australian laws.
• Investors in Norway: American Century Investment Management, Inc. and American Century Global Investment Management, Inc. are not registered with the Norwegian FSA.
• Investors in the Netherlands: American Century Investment Management, Inc. and American Century Global Investment Management, Inc. are not currently authorized by the Dutch Authority for the Financial Markets to provide investment advice, but an application for exemption from regulation is pending.
• Investors in Switzerland: This information is not intended for public distribution and is offered only on a “non public offering basis” in Switzerland pursuant to SESTA/SESTO and/or CISA/CISO.
This promotion is not intended for public distribution and may only be distributed on a non-public offering basis.