The information contained in this presentation is distributed for informational purposes only and should not be considered investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. The information contained in this presentation is accurate as of the date submitted, but is subject to change. Any performance information referenced in this presentation represents past performance and is not indicative of future returns. Any projections, targets, or estimates in this presentation are forward looking statements and are based on Epoch’s research, analysis, and assumptions made by Epoch. There can be no assurances that such projections, targets, or estimates will occur and the actual results may be materially different. Other events which were not taken into account in formulating such projections, targets, or estimates may occur and may significantly affect the returns or performance of any accounts and/or funds managed by Epoch. To the extent this presentation contains information about specific companies or securities including whether they are profitable or not, they are being provided as a means of illustrating our investment thesis. Past references to specific companies or securities are not a complete list of securities selected for clients and not all securities selected for clients in the past year were profitable. Global Choice Presented to: Public Employees' Retirement System of Mississippi | June 22, 2020 WILLIAM W. PRIEST, CFA CEO, Co-CIO & Portfolio Manager WILLIAM J. BOOTH, CFA Managing Director, Co-Chief Investment Officer & Portfolio Manager SCOTT WEISENBERGER Managing Director, Global Portfolio Management 399 Park Ave, New York, NY 10022
Transcript
The information contained in this presentation is distributed for informational purposes only and should not be considered investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. The information contained in this presentation is accurate as of the date submitted, but is subject to change. Any performance information referenced in this presentation represents past performance and is not indicative of future returns. Any projections, targets, or estimates in this presentation are forward looking statements and are based on Epoch’s research, analysis, and assumptions made by Epoch. There can be no assurances that such projections, targets, or estimates will occur and the actual results may be materially different. Other events which were not taken into account in formulating such projections, targets, or estimates may occur and may significantly affect the returns or performance of any accounts and/or funds managed by Epoch. To the extent this presentation contains information about specific companies or securities including whether they are profitable or not, they are being provided as a means of illustrating our investment thesis. Past references to specific companies or securities are not a complete list of securities selected for clients and not all securities selected for clients in the past year were profitable.
Global Choice
Presented to: Public Employees' Retirement System of Mississippi | June 22, 2020
WILLIAM W. PRIEST, CFACEO, Co-CIO & Portfolio Manager
WILLIAM J. BOOTH, CFAManaging Director, Co-Chief Investment Officer & Portfolio Manager
SCOTT WEISENBERGERManaging Director, Global Portfolio Management
399 Park Ave, New York, NY 10022
2
Topics for Discussion
2
EPOCH INVESTMENT
PARTNERS
Firm and Client Profile
Global Choice Team
Process
1 3
CLIENT INVESTMENT REVIEW
Performance and Attribution
Portfolio Positioning
Track Record
4
A RELATIONSHIP
WITH EPOCH
CAPITAL MARKETS
OUTLOOK
5 APPENDIX
3
Epoch Investment Partners
FIRM AND CLIENT PROFILE
GLOBAL CHOICE TEAM
PROCESS
4
1 As of March 31, 2020 may not total due to rounding.
2 The institutional clients shown were selected based on client type and client domicile across all strategies. It is not known whether the listed clients approve or disapprove of the advisory services provided.
Epoch’s Clients at a Glance
AUM: $25.4 BILLION1
REPRESENTATIVE CLIENTS2
Client Domicile
Global & Non-U.S. Equity Shareholder Yield
$10.2B
$16.8B $8.5B
Global Strategies U.S. Strategies
Global Equity
$1.6B
Non-U.S Large Cap
$2.5B
Global Choice
$2.5B
U.S. Small/ SMID Cap
$0.8B
U.S. Equity Shareholder Yield
$1.8B
U.S. All Cap/Choice
$1.5B
U.S. Large Cap
$4.4B
United States
$11.3B
Canada
$11.6B
Europe/Africa
$1.4B
Asia/Australia
$1.1B
Corporations Non-Profit & Other Government Health Services & Insurance Intermediary Union
• ArcelorMittal USA
• DXC Technology
• Kellogg Company
• Nova Scotia Power Inc.
• Sentinel Retirement Fund
• Bradley University
• Church of the Nazarene
• Masonic Homes of California
• Florida State Boardof Administration
• London CIV
• North Dakota StateInvestment Board
• Ohio Bureau of Workers’Compensation
• Public Employees’ Retirement System of Mississippi
• Blue Cross and Blue Shield of Kansas
• Boston Medical Center
• Greater Baltimore Medical Center
• OhioHealth
• CI – Assante Funds
• John Hancock Funds
• New York Life –MainStay Funds
• TD Bank Group
• Major League BaseballPlayers Association
• Theatrical State Employees, Local No. One, I.A.T.S.E.
• Steelworkers Pension Trust
Reporting Currency: USD
5
Global Choice
THE STRATEGY
• A concentrated global portfolio of 25 to 35
companies selected based on their ability to
generate free cash flow and allocate
it intelligently to create shareholder value
• High-conviction holdings, selected primarily
from other Epoch portfolios
• Flexibility to invest across geographies and the
market capitalization spectrum
• Blend of individual bottom-up opportunities with
top-down macroeconomic insights
• Portfolio construction framework designed to
minimize unintended risks and reduce volatility:
the strategy has below-market volatility in U.S.
dollars despite being concentrated
STRATEGY ROLE IN A PORTFOLIO
• Global capital appreciation
• Source of alpha in a core/satellite allocation
• Portfolio diversifier offering low correlations
with growth, value, and other accounting-based
styles due to strategy emphasis on free cash
flow
• Part of a best-ideas multimanager allocation
6
Portfolio Management Team
STRATEGY-FOCUSED TEAM INTEGRATING EXTENSIVE FIRM RESOURCES
Quantitative
Analysis & Risk
Management TeamPortfolio Strategy
Investment Policy Group
(IPG)
Analyze macroeconomic
conditions, geopolitical
influences and industry trends.
Communicate risk exposures
and provide tools for idea
generation and portfolio
construction.
Client
Portfolio
Management
Product specialists
embedded within the
investment team, focused
on client communications.
Global Choice Team
Bill Priest, CFAPortfolio Manager/Co-CIO
Bill Booth, CFAPortfolio Manager/Co-CIO
David PearlPortfolio Manager/Co-CIO
Mike Welhoelter, CFAPortfolio Manager/Co-CIO
Josepha KaufmanAnalyst
Michael TakataAnalyst
Tamzin Manning Client Portfolio Manager
Contribute to the investment process
through product management,
responsible investing research, and
portfolio implementation.
Fundamental Research Team
Epoch's research team offers industry experience and security analysis across strategies.
7
Epoch Investment Process
STOCK SELECTION
Fundamental, bottom-up deep-dive focused
on evaluating three key issues:
• Free Cash Flow profile: the ability of the
company to generate, sustain, and grow
FCF over time
• Capital allocation: management’s
framework and ability to allocate capital
effectively to create shareholder value
• Valuation: is there a disconnect between
the value of the business based on FCF
and the current market price of the security
Fundamental Research
• Market cap and liquidity filters narrow the
universe to ~6,000 stocks
• Analysts generate research candidates
based on their experience and insights
• The Epoch Core Model quantitatively
expresses our fundamental investment
beliefs and provides a complementary
source of ideas
– Increases breadth of research
– Helps prioritize research
• Strategy-specific screens are also utilized
in some cases
Idea Generation
~10,000 Stock Investment Universe
• Underlying strategies share the firm's Free
Cash Flow philosophy
• Strategies differ based on their investable
universe (geography, market capitalization)
and/or capital allocation focus
• Epoch portfolios provide a diversified pool
of investment candidates for consideration
in the Global Choice strategy
Epoch Portfolios
500–600 Holdings Across Strategies
8
Global Choice Investment Process
STOCK SELECTION
Considerations
• Risk-return profile
• Catalysts
• Market cap and liquidity
Considerations
Investment Policy Group insights
• Provides investment context
• Identifies global opportunities and risks
• Potentially influences sector and country choices
Top-Down Macroeconomic
Assessment
Global Choice
Portfolio(25–35)
Fundamental Bottom-Up Stock Opportunities(500 - 600 Epoch Portfolio holdings)
Analysts’ Best Ideas
9
Global Choice Investment Process
Analysis
• Third –party and
proprietary models
• Barra risk factors
• Performance attribution
analysis
• Epoch Core Model
Communication
• A risk manager is integrated
within the team as a co-portfolio
manager
• Facilitates constant
communication and more
accurate expression of
PM/analyst views in the portfolio
• Regular reports and periodic
reviews with investment team
Portfolio Construction
• Ensure the portfolio is taking
the risks it intends to take
• Further reduce overall volatility
by creating an efficient
portfolios, with position sizing
based on risk-return
considerations
PORTFOLIO CONSTRUCTION AND RISK MANAGEMENT
Ongoing Stock Evaluation
• Price target reached
• Change in investment thesis
• Alternatives with superior
risk-return characteristics
• Portfolio rebalancing
Page Intentionally Left Blank
11
Client Investment Review
PERFORMANCE AND ATTRIBUTION
PORTFOLIO POSITIONING
TRACK RECORD
12
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
Performance
PUBLIC EMPLOYEES' RETIREMENT SYSTEM MISSISSIPPI(As of March 31, 2020)
QTD 1 Year 3 Year 5 Year
Inception to Date
(2/26/12)
◼ Public Employees Retirement System
of Mississippi (Gross)-24.1 -13.9 2.2 2.2 6.6
◼ Public Employees Retirement System
of Mississippi (Net)-24.2 -14.3 1.7 1.6 6.1
◼ MSCI AC World Index (Net) -21.4 -11.2 1.5 2.8 5.8
MSCI AC World Index (Net) 26.6 -9.4 24.0 7.9 -2.4 4.2 22.8 4.6
1 Data represents a partial year from 2/26/12–12/31/12.
Performance for the most recent quarter is preliminary and subject to change. Returns are annualized for periods greater than one year. Periods less than one year are cumulative, unless otherwise noted.
Additional information regarding policies for calculating and reporting returns is available upon request. Past performance is no guarantee of future results.
13
-15%
-10%
-5%
0%
5%
10%
15%
20%
Performance
PUBLIC EMPLOYEES' RETIREMENT SYSTEM MISSISSIPPI(As of May 31, 2020)
QTD YTD 1 Year 3 Year 5 Year
Inception to Date
(2/26/12)
◼ Public Employees Retirement
System of Mississippi (Gross)15.0 -12.8 0.6 4.7 4.7 8.3
◼ Public Employees Retirement
System of Mississippi (Net)15.0 -12.9 0.1 4.1 4.2 7.8
◼ MSCI AC World Index (Net) 15.5 -9.2 5.4 5.2 5.3 7.5
Reporting Currency: USD
Performance for the most recent quarter is preliminary and subject to change. Returns are annualized for periods greater than one year. Periods less than one year are cumulative, unless otherwise noted.
Additional information regarding policies for calculating and reporting returns is available upon request. Past performance is no guarantee of future results.
14
Performance Attribution
Source: FactSet Research Systems, Inc.; MSCI, Inc. Totals may not add due to rounding.
Account MSCI AC World Index Attribution Effects
Sectors
Average
Weight
Return
(%)
Average
Weight
Return
(%)
Allocation
Effect
Stock
Selection
Total
Effect
Communication Services 6.8 -15.0 8.9 -6.1 0.3 -2.0 -1.7
Information Technology 16.7 0.6 16.7 6.5 -0.2 -0.5 -0.7
Materials 6.9 -0.2 4.7 -21.3 -0.1 1.4 1.3
Real Estate -- -- 3.3 -19.0 0.3 -- 0.3
Utilities -- -- 3.4 -5.9 -0.1 -- -0.1
[Cash] 4.0 1.7 -- -- -0.2 -- -0.2
[Unassigned] -- -- 0.4 -12.6 -0.0 -- -0.0
Total 2.5 -4.7 -2.2
PUBLIC EMPLOYEES' RETIREMENT SYSTEM MISSISSIPPI(One Year Ending March 31, 2020)
15
Top Five Contributors and Detractors & New and Closed Positions
Source: FactSet Research Systems, Inc. New and closed positions are sorted in descending order from the largest position weight.
Top Five Contributors
Contribution to
Portfolio Return (%)
Martin Marietta Materials, Inc. 1.3
Microsoft Corporation 1.1
Applied Materials, Inc. 0.8
Marvell Technology Group Ltd. 0.6
Costco Wholesale Corporation 0.4
Bottom Five Detractors
Contribution to
Portfolio Return (%)
MGM Resorts International -2.2
Nexstar Media Group, Inc. Class A -1.8
Bausch Health Companies Inc. -1.5
Safran S.A. -1.3
Boeing Company -1.3
New Positions
Amazon.com, Inc.
Centene Corporation
SoftBank Group Corp.
Walmart Inc.
Charter Communications, Inc. Class A
Coca-Cola Company
Broadcom Inc.
Samsung Electronics Co., Ltd. Sponsored GDR
Fidelity National Information Services, Inc.
ABB Ltd.
Closed Positions
Safran S.A.
Airbus SE
PayPal Holdings Inc
Phillips 66
Hexcel Corporation
DuPont de Nemours, Inc.
Deutsche Telekom AG
United Technologies Corp.
Applied Materials, Inc.
Marvell Technology Group Ltd.
PUBLIC EMPLOYEES' RETIREMENT SYSTEM MISSISSIPPI(One Year Ending March 31, 2020)
16
Sector Allocation & Characteristics
Source: FactSet Research Systems; MSCI, Inc. The data is unaudited and may change at any time. The data is shown for informational purposes only and is not indicative of future portfolio characteristics or
returns. Totals may not add due to rounding.
Sector
Portfolio
Weight (%)
MSCI AC
World (%)
Communication Services 10.7 9.3
Consumer Discretionary 7.4 10.8
Consumer Staples 6.5 8.8
Energy -- 3.7
Financials 6.9 14.4
Health Care 24.5 13.2
Industrials 6.3 9.6
Information Technology 22.8 18.7
Materials 6.0 4.4
Real Estate -- 3.1
Utilities -- 3.6
[Cash] 8.9 --
Characteristics Portfolio MSCI AC World
Dividend Yield (%) 1.7 2.9
Enterprise Value to EBITDA (x) 18.0 13.2
Weighted Average Market Cap ($M) 249,924 184,489
Weighted Median Market Cap ($M) 96,264 57,444
Predicted Beta 0.87 --
12-Month Turnover 89% --
Number of Equity Positions 30 3,047
Sector Weights Relative to Benchmark
-7.5
-3.7
-3.6
-3.4
-3.2
-3.1
-2.3
1.4
1.6
4.0
11.2
Financials
Energy
Utilities
Consumer Discretionary
Industrials
Real Estate
Consumer Staples
Communication Services
Materials
Information Technology
Health Care
Reporting Currency: USD
PUBLIC EMPLOYEES' RETIREMENT SYSTEM MISSISSIPPI(As of March 31, 2020)
17
Top Ten Holdings & Countries
Source: FactSet Research Systems, Inc. Totals may not add due to rounding.
Top Ten Holdings Portfolio Weight (%)
Amazon.com, Inc. 5.4
Microsoft Corporation 5.2
Alphabet Inc. Class C 3.8
Takeda Pharmaceutical Co. Ltd. 3.8
Centene Corporation 3.8
Danaher Corporation 3.7
SoftBank Group Corp. 3.6
Merck & Co., Inc. 3.5
Amgen Inc. 3.5
CME Group Inc. Class A 3.4
Total 39.8
Top Ten Countries Portfolio Weight (%)
United States 72.3
Japan 7.4
Korea 2.9
Switzerland 2.7
France 2.7
Germany 1.9
Hong Kong 1.6
Total 91.5
PUBLIC EMPLOYEES' RETIREMENT SYSTEM MISSISSIPPI(As of March 31, 2020)
18
Performance Attribution
Source: FactSet Research Systems, Inc.; MSCI Inc. Totals may not add due to rounding.
19
Country and Regional Weights
Source: FactSet Research Systems Inc.; MSCI Inc. The data shown above is of a representative account and such data may vary for each client in the strategy due to market conditions, client guidelines and
diversity of portfolio holdings. The data is unaudited and may change at any time. The data is supplemental to the composite presentation, is shown for informational purposes only, and is not indicative of future
portfolio characteristics or returns. Totals may not add due to rounding.
EPOCH GLOBAL CHOICE STRATEGY(Quarter Ending March 31, 2020)
Revenue by Region
Portfolio
Weight (%)
MSCI All Country
World Weight (%)
North America 53.2 44.4
Asia 19.3 28.0
Europe 14.5 17.8
Other 12.2 9.5
Revenue by Market
Classification
Portfolio
Weight (%)
MSCI All Country
World Weight (%)
Developed Markets 75.2 71.3
Emerging Markets 14.3 22.2
Other 10.4 6.5
Top Countries by Domicile
Portfolio
Weight (%)
MSCI All Country
World Weight (%)
United States 76.3 56.6
Japan 7.8 7.5
Korea 3.1 1.4
Switzerland 2.8 3.1
France 2.8 3.1
20
Characteristics
1 The data shown is of a representative account and such data may vary for each client in the strategy due to market conditions, client guidelines and diversity of portfolio holdings. The data is unaudited and
may change at any time. The data is supplemental to the composite presentation, is shown for informational purposes only, and is not indicative of future portfolio characteristics or returns.
2 As of December 31, 2018. Inception date is September 30, 2005. Performance for the most recent quarter is preliminary and subject to change.
3 The risk statistics are shown as supplemental information only and supplement the Composite presentation which is located within the Disclosure section of the presentation.
Source: FactSet Research Systems; MSCI, Inc.
EPOCH GLOBAL CHOICE STRATEGY(As of March 31, 2020)
Characteristics Portfolio
MSCI All
Country World
Dividend Yield (%) 1.7 2.9
Enterprise Value to EBITDA (x) 19.3 13.1
Weighted Average Market Cap ($M) 249,549 184,490
Weighted Median Market Cap ($M) 96,264 57,444
Predicted Beta 1.02 --
12-Month Turnover 85.7% --
Number of Equity Positions 30 3,047
Risk Return Metrics
Since Inception1,2 Portfolio
MSCI All
Country World
Standard Deviation 14.9 15.8
Portfolio vs. MSCI
All Country World
Information Ratio 0.45
Alpha3 2.92
Beta 0.88
R-Squared 0.88
Reporting Currency: USD
21
Portfolio Positioning
As of March 31, 2020
Microsoft
Amazon
SAP
Merck
Abbott Laboratories
Takeda
AIA Group
Linde
ASML
The Digital Age and the transition from “atoms” to “bits” implies a capital-light economy in which
technology is being substituted for labor and physical assets. Free cash flow generation is increasingly
dependent on how companies adapt their business model to the Digital Age. "As a service" business
models; the Cloud, the Internet of Things, big data, AI, and mobile and digital payments, are particularly
attractive.
Our health care sector positions provide exposure to a variety of structural growth trends we see shaping
the industry, such as precision-based medicine, innovative drug and device development, the shift from
fee for service to value based healthcare and direct-to-consumer services. A focus on innovation should
drive performance regardless of the economic backdrop and provide insulation against pricing pressure.
Overweight the United States due to the domicile of technology companies, superior growth relative to
the rest of the world and ex-US geopolitical concerns. Focus on Global Champions outside of the United
States, who possess market share characteristics implying pricing power and volume opportunities.
Against the backdrop of the COVID-19 crisis, we are focused on owning resilient companies that
can weather the storm, delivering good operating performance, including solid free cash flow
generation, without over-reliance on broader macroeconomic developments.
22
Source: Epoch Investment Partners, Inc. The data shown above is of a representative account and such data may vary for each client in the strategy due to market conditions, client guidelines and diversity of
portfolio holdings. The data is unaudited and may change at any time. The data is supplemental to the composite presentation, is shown for informational purposes only, and is not indicative of future portfolio
characteristics or returns.
Global Choice Portfolio Holdings
(As of March 31, 2020)
Sector Security Domicile Portfolio Weight (%)Health Care 26.0% Centene Corporation United States 4.2
Takeda Pharmaceutical Co. Ltd. Japan 4.0
Danaher Corporation United States 3.9
Merck & Co., Inc. United States 3.7Amgen Inc. United States 3.7
UnitedHealth Group Incorporated United States 3.5
Abbott Laboratories United States 2.9Information Technology 24.0% Microsoft Corporation United States 5.5
Broadcom Inc. United States 3.2
Samsung Electronics Co., Ltd. Sponsored GDR Korea 3.1
Spotify Technology SA United States 2.9
Fidelity National Information Services, Inc. United States 2.9Universal Display Corporation United States 2.3Visa Inc. Class A United States 2.1
SAP SE Germany 2.0Communication Services 11.3% Alphabet Inc. Class C United States 4.1
SoftBank Group Corp. Japan 3.8Charter Communications, Inc. Class A United States 3.5
Consumer Discretionary 7.9% Amazon.com, Inc. United States 5.7
Dollar Tree, Inc. United States 2.2Financials 7.4% CME Group Inc. Class A United States 3.6
Willis Towers Watson Public Limited Company United States 2.0
AIA Group Limited Hong Kong 1.8Consumer Staples 6.9% Walmart Inc. United States 3.5
Coca-Cola Company United States 3.3Industrials 6.7% ABB Ltd. Switzerland 2.8
Bureau Veritas SA France 2.8
Raytheon Company United States 1.0Materials 6.3% Linde plc United States 3.3
Martin Marietta Materials, Inc. United States 3.0Cash 3.6
Total 100.0
23
1 Inception date is September 30, 2005. Performance for the most recent quarter is preliminary and subject to change.
2 The risk statistics are shown as supplemental information only and supplement the Composite presentation which is located within the Disclosure section of the presentation.
3 Data represents a partial year from 9/30/05-12/31/05.
4 Implied alpha is adjusted for the lower beta achieved by the strategy.
Past performance is no guarantee of future results.
“As Covid-19 impacts every aspect of our work and life, we've
seen two years' worth of digital transformation in two months“
-- Microsoft CEO, Satya Nadella, April 29
90
100
110
120
130
140
150
160
170
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
201
9E
202
0E
202
1E
202
2E
202
3E
202
4E
202
5E
Physical industries (index) Digital industries (index)
Productivity of digital vs physical industries
Source: The Coming Productivity Boom, Epoch Investment Partners
0
5
10
15
20
25
30
35
40
US: E-Commerce as % of retail China: E-Commerce as % of retail
"If you're a shareowner in Amazon, you may
want to take a seat, because we're not thinking
small.” - Jeff Bezos, Amazon, April 29
34
COVID-19 as an Accelerant: Healthcare
The pandemic has prompted a reckoning throughout the country’s health care infrastructure
• A new era of health care preparedness: Covid-19 has prompted calls for a dramatic scaling up of the
country’s disaster readiness
• Supply-chains being domesticated: Especially diagnostic equipment, therapeutics, and PPE
• Big Tech in HC: The healthcare industry is undergoing systematic changes driven by an aging
demographic, the explosion in healthcare data, and increasingly complex administrative
infrastructure. The Covid-19 outbreak has made these challenges even more urgent.
o 1/3 of the world’s data resides in the healthcare industry – Ponemon Institute
o Covid-19 has accelerated telemedicine ‘by a decade’
• Biotech and medical devices: Have especially benefited from the pandemic
US pharmaceutical imports soar
Source: US Census Bureau, CFR, BloombergSource: National Health Statistics, NBER, Epoch Investment Partners
U.S. Healthcare Spending (% of GDP)
0
20
40
60
80
100
120
140
160
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
201
9
202
0
202
1
US pharma exports (12m, USD bn) US pharma imports (12m, USD bn)
4
6
8
10
12
14
16
18
20
22
196
0
196
3
196
6
196
9
197
2
197
5
197
8
198
1
198
4
198
7
199
0
199
3
199
6
199
9
200
2
200
5
200
8
201
1
201
4
201
7
202
0E
202
3E
202
6E
Healthcare spending (% of GDP) Post-COVID shock
35
November Election: Yet Another Source of Uncertainty and Volatility• Taxes: Biden has proposed reversing half of the Trump tax cut, taking the statuary rate to 28%.
Would increase the effective rate by 4-5%, shaving $9 off 2021 EPS
o Might also increase payroll tax, as well as individual taxes
o Raise capital gains tax to income rates for anyone making > $1 mn a year
o Change carried interest loophole
• Energy: Roll back energy deregulation. Biden is very serious about climate change
• Pharma pricing: Allow Medicare to negotiate drug pricing directly
o With Covid the mood has changed – more bipartisan that drug prices need to come down
2008 5,348 108 Five or fewer (35.61)% (36.30)% (40.71)% N.A 17.52% 17.02%
2007 6,682 67 Five or fewer 17.19% 16.20% 9.04% N.A N.P N.P
2006 4,408 19 Five or fewer 29.95% 28.86% 20.07% N.A N.P N.P
2005* 2,235 23 Five or fewer 6.35% 6.13% 3.06% N.A N.P N.P
N.A. - Information is not statistically meaningful due to an insufficient number of portfolios in the composite for the entire year. *Results shown for the year 2005 represent partial period performance from
October 1, 2005 through December 31, 2005. **Net performance reflects the gross-of-fees return reduced by the investment management fee incurred. Effective 1/2008, net performance is calculated by
deducting the actual investment management fee incurred by each portfolio in the composite. Prior to 1/2008, net-of-fee returns reflect the deduction of the highest annual management fee, applied on a
monthly basis. N.P. – Information is not presented because 36 monthly returns are not available.
1. Global Choice Composite contains fully discretionary portfolios managed by Epoch using an investment strategy that pursues long-term capital appreciation by investing
in a concentrated portfolio of global businesses we believe have superior risk-reward profiles. Our bottom-up security selection and risk management process leads to a
portfolio of 25-35 stocks. The portfolio reflects the highest-conviction ideas of our investment team as appropriate for a concentrated portfolio. Companies are selected
based on their ability to generate free cash flow and allocate it intelligently to benefit shareholders. The minimum account size for this composite is $500 thousand.
2. For comparison purposes the composite is measured against the MSCI World (Net) Index [Net total return indices reinvest dividends after the deduction of withholding
taxes, using (for international indices) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties]. Effective 1/2009, the
benchmark was changed from the MSCI World (Gross) Index to the MSCI World (Net) Index because it is more representative of the firm’s accounting methodology with
regards to foreign withholding tax treatment. This change has been applied retroactively.
44
Global Choice
Global Choice (Separate account minimum $50 million)
Assets Under Management Fee
First $50 million 0.85%
Next $50 million 0.75%
Over $100 million 0.65%
Past performance is not indicative of future results. Actual investment advisory fees incurred by clients may vary. Minimum account sizes, fees and fee structure, and other conditions may be waived or
modified in the future, and have been waived or modified in the past, at the discretion of Epoch.
3. Epoch Investment Partners, Inc. claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in
compliance with the GIPS standards. Epoch Investment Partners, Inc. has been independently verified for the periods June 21, 2004 through December 31, 2019.
Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s
policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The Global Choice composite has been examined
for the periods October 1, 2005 through March 31, 2019. Verification does not ensure the accuracy of any specific composite presentation. The verification and
performance examination reports are available upon request.
4. Epoch Investment Partners, Inc. is a wholly owned subsidiary of The Toronto Dominion Bank. Epoch Investment Partners, Inc. (“Epoch”) became a registered
investment adviser under the Investment Advisers Act of 1940 in June 2004. Policies for valuing portfolios, calculating performance, and preparing compliant
presentations are available upon request.
5. Results are based on fully discretionary accounts under management, including those accounts no longer with the firm.
6. Valuations are computed and performance is reported in U.S. dollars. Returns are presented gross and net of management fees and include the reinvestment of all
income. Gross-of-fees returns are presented before management fees but after all trading expenses. Net performance reflects the gross-of-fees return reduced by the
investment management fee and performance-based fee (where applicable) incurred. Effective 1/2008, net performance is calculated by deducting the actual
investment management fee incurred by each portfolio in the composite. Prior to 1/2008, net-of-fee returns reflect the deduction of the highest annual management fee,
applied on a monthly basis. Returns include the effect of foreign currency exchange rates. Composite and benchmark (international indices) returns are presented net of
non-reclaimable withholding taxes.
7. Internal dispersion is calculated using an asset-weighted standard deviation of annual gross returns of those accounts that were included in the composite for the entire
year. Internal dispersion figures that are not meaningful due to the limited number of accounts in the composite are annotated by N/A. The three-year annualized
standard deviation measures the variability of the composite and the benchmark returns over the preceding 36-month period.
8. The Global Choice Composite was created in October 2005. A complete list of composite descriptions is available upon request.
9. The investment management fee schedule is as follows:
