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WELCOME Knowledge Exchange 2018
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Page 1: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

WELCOME

Knowledge Exchange 2018

Page 2: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

1

Janus Henderson Investors (Australia) Funds Management Limited

Level 36, Grosvenor Place, 225 George Street, Sydney NSW 2000

T +61 (0)2 8298 4000 F +61 (0)2 8298 4001

Important information

This information is solely intended for the use of wholesale clients and is not for general public distribution. This document is issued by Janus Henderson Investors

(Australia) Funds Management Limited (AFSL 444268, ABN 43 164 177 244) (‘Janus Henderson’).

The information provided in this document is confidential and is for the sole use of the recipient. It may not be disclosed, copied or distributed in any form without

the express permission of Janus Henderson and to the extent that it is passed on, care must be taken to ensure that this is in a form which accurately reflects the

information presented here.

Whilst Janus Henderson believe that the information is correct at the date of this document, no warranty or representation is given to this effect and no

responsibility can be accepted by Janus Henderson to any end users for any action taken on the basis of this information. The information herein shall not in any

way constitute advice or an invitation to invest. It is solely for information purposes and subject to change without notice.

Past performance is not indicative of future performance.

No representation or warranty is given as to the likelihood of achievement of any forward-looking statement in this document, or any events or results expressed

or implied in any forward-looking statement. Such statements are not guarantees of future performance and are by their nature subject to significant uncertainties,

risks and contingencies. Actual results or events may differ materially from any expressed or implied in any forward-looking statement and deviations are both

normal and to be expected.

All opinions and estimates in this information are subject to change without notice. Janus Henderson is not under any obligation to update this information to the

extent that it is or becomes out of date or incorrect.

Janus Henderson Investors Australia is the name under which Janus Henderson Investors Australia Limited (ABN 47 124 279 518), Janus Henderson Investors

(Australia) Funds Management Limited (AFSL 444268, ABN 43 164 177 244) and Janus Henderson Investors (Australia) Institutional Funds Management Limited

(AFSL 444266, ABN 16 165 119 531) operate. These companies are wholly owned subsidiaries of Janus Henderson Group plc (incorporated in Jersey, registered

no.101484, registered office 47 Esplanade, St Helier, Jersey JE1 0BD).

© Janus Henderson Investors. Janus Henderson, Janus, INTECH and Perkins are trademarks of Janus Henderson Investors. The name Janus Henderson

Investors includes HGI Group Limited, Henderson Global Investors (Brand Management) Sarl and Janus International Holding LLC.

Page 3: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

2

Janus Henderson Investors (Australia) Funds Management Limited

Level 36, Grosvenor Place, 225 George Street, Sydney NSW 2000

T +61 (0)2 8298 4000 F +61 (0)2 8298 4001

Researcher disclaimer

The Lonsec Ratings (assigned as follows: Janus Henderson Tactical Income Fund - October 2017; Janus Henderson Global Fixed Interest Total Return Fund -

October 2017; Janus Henderson Global Equity Income Fund – February 2018) presented in this document are published by Lonsec Research Pty Ltd ABN 11 151

658 561 AFSL 421 445. The Ratings are limited to “General Advice” (as defined in the Corporations Act 2001 (Cth)) and based solely on consideration of the

investment merits of the financial products. Past performance information is for illustrative purposes only and is not indicative of future performance. It is not a

recommendation to purchase, sell or hold Janus Henderson Investors products, and you should seek independent financial advice before investing in these

products. The Ratings are subject to change without notice and Lonsec assumes no obligation to update the relevant documents following publication. Lonsec

receives a fee from the Fund Manager for researching the products using comprehensive and objective criteria. For further information regarding Lonsec’s Ratings

methodology, please refer to our website at: http://www.lonsecresearch.com.au/research-solutions/our-ratings.

The Zenith Investment Partners (“Zenith”) Australian Financial Services License No. 226872 rating (assigned as follows Janus Henderson Tactical Income Fund

June 2017; Janus Henderson Global Emerging Markets Equity Fund - October 2017; Janus Henderson Global Fixed Interest Total Return Fund - March 2017;

Janus Henderson Global Equity Income Fund – November 2017) referred to in this document is limited to “General Advice” (as defined by the Corporations Act

2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual. It is not a

specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment

decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of,

and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Zenith

usually charges the product issuer, fund manager or a related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings

definitions and regulatory compliance are available on our Product Assessment’s and at http://www.zenithpartners.com.au/RegulatoryGuidelines.

Page 4: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

3

Agenda

Details Speaker

Welcome Matt Gaden

Head of Distribution

Australian fixed interest

Jay Sivapalan

Portfolio Manager, Australian Fixed Interest

Global fixed interest Andrew Mulliner

Portfolio Manager, Global Fixed Interest

Global equity income Andrew Jones

Portfolio Manager, Global Equity Income

Global emerging markets

Glen Finegan

Head of Global Emerging Market Equities

Ian Tabberer

Portfolio Manager, Global Emerging Market

Equities

Conclusion Matt Gaden

Head of Distribution

Page 5: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

4

Performance

Janus Henderson Tactical Income Fund

Period to:

31 January 2018

1 year

(%)

3 years

(% p.a.)

5 years

(% p.a.)

Since inception

(% p.a.)

Performance 3.17 2.99 3.68 5.60

Benchmark 2.26 2.23 3.24 4.39

Excess returns (net) 0.91 0.76 0.44 1.21

Source: Janus Henderson Investors, as at 31 January 2018. Inception date: 31 June 2009.

Benchmark: Bloomberg AusBond Bank Bill Index and Bloomberg AusBond Composite 0+ Yr Index (equally weighted)

Note: Past performance is not indicative of future performance.

• All major platforms

Platform availability Researcher rating

Page 6: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

5

Performance

Janus Henderson Global Fixed Interest Total Return Fund

Period to:

31 January 2018

1 year

(%)

2 years

(% p.a.)

3 years

(% p.a.)

Since inception

(% p.a.)

Performance 6.49 6.53 5.22 4.63

Benchmark1 1.50 1.59 1.75 1.87

Excess returns (net) 4.99 4.94 3.47 2.76

Benchmark2 3.58 3.82 3.42 4.71

Excess returns (net) 2.91 2.71 1.80 -0.08

Source: Janus Henderson investors, as at 31 January 2018. Inception date: 1 July 2014.

Benchmark: 1Reserve Bank of Australia Cash Rate. 2Barclays Multiverse Index hedged in Australian dollars.

Note: Past performance is not indicative of future performance.

• ANZ Grow Wrap

• BT Wrap

• IOOF

• Linear

• Netwealth

• OneAnswer

Platform availability Researcher rating

Page 7: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

6

Performance

Janus Henderson Global Equity Income Fund

Source: Janus Henderson Investors, as at 31 January 2018. Inception date: 1 May 2015.

Benchmark: MSCI World ex-Australia Index (net dividends reinvested) in AUD.

Note: Past performance is not indicative of future performance.

Period to:

31 January 2018

1 year

(%)

2 years

(% p.a.)

Since inception

(% p.a.)

Performance 18.03 9.06 6.94

Benchmark 18.15 13.41 8.93

Excess returns (net) -0.12 -4.35 -1.99

• AMP North/My North

• Hub 24

Platform availability Researcher rating

Page 8: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

7

Performance

Janus Henderson Global Emerging Markets Equity Fund

Source: Janus Henderson Investors, as at 31 January 2018. Inception date: 29 July 2016.

Benchmark: MSCI Emerging Markets Index (net dividends reinvested) in AUD.

Note: Past performance is not indicative of future performance.

Period to:

31 January 2018

1 year

(%)

Since inception

(% p.a.)

Performance 21.79 13.34

Benchmark 32.20 23.13

Excess returns (net) -10.41 -9.79

• BT Wrap

• BT Panorama

• Netwealth

• Powerwrap

Platform availability Researcher rating

Page 9: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

Weathering all seasons:

Australian fixed interest

Jay Sivapalan

Portfolio Manager, Australian Fixed Interest

Page 10: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

9

Ten years on…

Government yield (10yr) Government yield (10yr)

0

1

2

3

4

5

6

7

2008 2010 2012 2014 2016 2018

US

Australia

0

100

200

300

400

500

600

700

2008 2010 2012 2014 2016 2018

Australia

US

%

Basis

poin

ts (

bps)

Source: Janus Henderson Investors and Bloomberg, as at 15 February 2018.

Page 11: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

10

Australian economy in a nutshell

GDP growth Unemployment Wages growth

Source: Australian Bureau of Statistics, as at 19 February 2018.

Note: GDP growth: Janus Henderson Investors forecasts of y/y GDP growth with percentage point contributions from GDP components.

Unemployment: Forecast numbers are estimated projections only based on RBA research.

Wages growth: Wage Price Index y/y % growth.

-1.50 -0.50 0.50 1.50 2.50 3.50

Consumption

Housing

Business investment

Public sector

Net exports

Stat discrepancy

GDP: 3.0%

Stocks

3

4

5

6

7

2006 2009 2012 2015 2018

%

RBA estimate of full employment rate

RBA forecast

1

2

3

4

5

2006 2008 2011 2014 2017

Page 12: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

11

What’s priced in

United States

Source: Janus Henderson Investors and Bloomberg, as at 16 February 2018.

Note: Cash rate expectations represent cash futures contracts and OIS forward 1m cash rate.

2016: Cash rate expectation as at 2 August 2016. 2018: Cash rate expectation as at 16 February 2018.

Forecast numbers are estimated projections only based on internally generated research.

Cash rate expectations

Australia

Europe

-1

2

5

2007 2011 2015 2019 2023

%

%

%

-1

2

5

2007 2011 2015 2019 2023

0

1

2

3

4

5

6

7

8

2007 2011 2015 2019 2023

2.5%

0.5%

2.5%

Actual 2016 2018

Legend:

Page 13: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

12

Rising tide lifts all boats

Source: Janus Henderson Investors and Bloomberg, as at 15 February 2018.

Note: For illustrative purposes only.

References made to individual securities should not constitute or form part of any offer or solicitation to issue, sell, subscribe or purchase the security research.

Australian government yield curve

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

1 2 3 4 5 6 7 8 9 10

%

2018

2017

2016

Macquarie Group

Transurban

Dexus Asciano

Term (years)

Page 14: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

13

Relative value

Infrastructure Utilities

Source: Janus Henderson Investors and CBA Credit, as at 31 January 2018.

Asset swap spreads

Ba

sis

po

ints

(b

ps)

0

50

100

150

200

250

300

350

2000 2006 2012 2018

0

50

100

150

200

250

300

350

2000 2006 2012 2018

Ba

sis

po

ints

(b

ps)

Page 15: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

14

Corporate debt

Multinet Gas

Key features

• Gas distribution in Melbourne

• High barriers to entry

• Strong operating cash flows

• Improving efficiency

• Stable credit

Summary information

Maturity: December 2024

Rating: BBB+

Current yield: 3.83%

Risk free rate: 2.65%

Spread 1.18%

Source: Janus Henderson Investors and Bloomberg, as at 14 February 2018.

Note: Image sourced: https://oilprice.com/Latest-Energy-News/World-News/Latin-American-Energy-Outlook-Natural-Gas-Leads-The-Way.html.

References made to individual securities should not constitute or form part of any offer or solicitation to issue, sell, subscribe or purchase the security research.

Page 16: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

15

What’s keeping markets awake?

Source: Images sourced from Google (royalty free icons).

Page 17: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

16

Managing the downside

Monthly returns Interest rate risk

Janus Henderson Tactical Income Fund

Du

ratio

n (

ye

ars

)

Source: Janus Henderson Investors and Bloomberg, as at 30 January 2018.

Note: Australian bond market represented by Bloomberg AusBond Composite 0+ Yr Index.

Fund = Janus Henderson Tactical Income Fund.

Benchmark = Bloomberg AusBond Bank Bill Index and Bloomberg AusBond Composite 0+ Yr Index equally weighted.

Net performance. Past performance is no guarantee of future results.

-2%

-1%

1%

2%

3%

4%

2009 2011 2013 2015 2017

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2010 2012 2014 2016 2018

Benchmark

Fund

Australian bond market Fund

Page 18: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

17

Weathering all seasons

• Central banks removing easy monetary policy…already priced in.

• Ultimately, higher yields a good thing for investors and restores

defensive attributes.

• Growth and inflation surprises could cause turbulence.

Defensive strategies with ample flexibility to

manage interest rate risk are

best placed to weather all seasons.

Page 19: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

Opportunities abroad:

Global Fixed Interest

Andrew Mulliner

Portfolio Manager, Global Fixed Interest

Page 20: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

19

Why Australians should travel abroad

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Au

str

alia

10y U

S

Ja

pa

n

Ge

rma

ny

(AA

A)

Fra

nce

(AA

)

Spain

(BB

B+

)

Ita

ly (

BB

B)

Au

sB

on

dC

red

it0

+

Eu

rop

ea

nIG

co

rps

US

D IG

co

rps

£ IG

co

rps

EM

IG

co

rps

Eu

rop

ea

nH

Y c

orp

s

US

HY

co

rps

EM

HY

co

rps

Local

FX hedged to AUD

Higher yields available outside Australia (after hedging)!

Yie

ld (

%)

Source: Janus Henderson Investors and Bloomberg, as at 24 January 2018.

Note: Assume 1-year holding period and 3-month FFX hedge.

Page 21: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

20

Opportunities but flexibility required

Significant dispersion of returns within fixed income

Cash Emerging market debt Asset Backed Securities

US Treasuries Global investment grade corporates Secured Loans

US Treasuries inflation-linked Global High Yield Australia Broad Market

Difference between best and worst performer

11.2% 43.6% 64.4% 15.0% 15.6% 18.4% 18.4% 7.5% 10.4% 15.5% 11.6%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

12.1% 14.0% 60.7% 15.3% 14.1% 18.9% 9.0% 7.8% 3.6% 16.2% 12.7%

11.6% 11.1% 47.5% 14.0% 9.8% 17.1% 7.1% 7.7% 0.8% 10.4% 8.0%

9.1% 3.8% 25.9% 10.8% 6.8% 10.8% 4.4% 6.0% 0.3% 8.0% 5.8%

5.6% -1.1% 16.3% 8.8% 5.0% 10.8% 0.3% 4.5% 0.3% 6.1% 5.3%

3.4% -4.8% 12.4% 7.4% 3.2% 10.4% 0.1% 3.3% -0.1% 4.8% 3.3%

2.3% -8.6% 10.0% 6.3% 2.8% 7.3% -0.7% 2.5% -0.2% 1.6% 3.1%

1.8% -22.2% 1.0% 5.9% 0.3% 3.9% -3.4% 2.1% -1.7% 1.6% 2.4%

1.7% -27.0% -1.8% 1.4% -0.8% 2.2% -7.1% 0.9% -2.0% 1.1% 1.4%

0.9% -29.6% -3.7% 0.3% -1.5% 0.5% -9.4% 0.3% -6.6% 0.7% 1.1%

Source: Merrill Lynch, Credit Suisse, Barclays, as at 31 December 2017.

Note: Merrill Lynch indices: ML US Treasury master (G0Q0); ML US Treasuries inflation-linked (G0QI); ML Global broad market corporates (G0BC) hedged to USD; ML Australia

broad market (AUD0) hedged to USD; ML Global High Yield (HW00) hedged to USD); ML US 3-month constant maturity overnight Libor; Credit Suisse Western European

Leveraged Loans Index; Barclays Pan European 50/50 AAA/AA ABS FRN Composite Index (EUR); Emerging market debt is 50/50 blend of JPM GBI EM local currency.

index in USD and JPM EMBI Global Diversified Index.

Page 22: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

21

Everything is awesome!

Global PMIs* suggest the global economy continues to rebound

PMI above 50

PMI below 50

PMI above 55

PMI below 45

Source: Bloomberg, as of 31 December 2017.

Note: A reading above 50 (green areas) implies expansion and a reading below 50 implies contraction (yellow and orange areas).

*The Purchasing Managers' Index (PMI) is an indicator of the economic health of the manufacturing sector. The PMI is based on five major indicators: new orders,

inventory levels, production, supplier deliveries and the employment environment.

Page 23: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

22

Where’s my Philips curve?

US Germany

0

2

4

6

8

10

12

1988 1996 2004 2012

Unemployment Rate (%)

Avg. Hourly Earnings (yoy %)

-4

-2

0

2

4

6

8

10

12

14

1992 1998 2004 2010 2016

Unemployment Rate (%)

Employee Compensation per Hour (yoy %)

Source: Bloomberg, as of 31 December 2017.

Page 24: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

23

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2007 2009 2011 2013 2015 2017 2019

US Fed

Bank of England

European Central Bank

Bank of Japan

Peak central bank stimulus in the past

A slow rollover in G4 Central Bank Assets (US$bn)

• FED reducing

balance sheet

• ECB to end asset

purchases in 2018

• BOE halts QE

program Mar-17

• BOJ introduces

yield curve control

Bill

ions (

$)

Source: Datastream, as at 31 December 2017.

Note: Forecasts for periods beyond this date shown in diamond shaded area.

Page 25: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

24

Clouds on the horizon?

G7 + E7 Industrial Output and Real Narrow Money (% 6M)

Source: Datastream, as at 31 December 2017.

-15.0

-10.0

-5.0

0.0

5.0

10.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Industrial Output

Real Narrow Money

Peak in narrow money: June 2017

Industrial output peaks March 2018?

Page 26: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

25

What drives positioning?

Building blocks of asset allocation

Expected return

Volatility

Asset correlation

Page 27: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

26

Strength in depth: coverage across fixed income

Source: Janus Henderson Investors, as at 28 September 2017.

110 investment professionals in US, Europe and Australia

Credit Research

(21)

Portfolio

Managers (14)

Central Dealing Team (12)

Analysts (4)

Portfolio

Managers (1)

Client Portfolio Managers (8)

Portfolio

Managers /

Analysts (4)

Investment Strategy Group

Emerging Market

Credit

Corporate credit – Investment grade

and high yield

Rates &

Government

Bonds

Analysts (4)

Portfolio

Managers (2)

Portfolio Analysts

(2)

Secured Loans

Analysts (4)

Portfolio

Managers (4)

Securitised

Page 28: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

27

0% 10% 20% 30% 40% 50% 60% 70%

Govt - Fixed Interest

Govt - Index Linked

Govt - Emerging Markets

Corporate - Investment Grade

Corporate - Emerging Markets

Corporate - High Yield

Secured Loans and FRNs

Asset or Mortgage Backed

Cash and Derivatives

Feb-18

Government

Corporate

Secured

Duration range: 0 – 6 years

Source: Janus Henderson Investors, as at 15 February 2018.

Note: * Typical range is 0-20%, however this may be increased to 50% in exceptional circumstances.

Where do we see the opportunity?

% of NAV

*

Page 29: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

28

Opportunistic government bond exposure

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2012 2013 2014 2015 2016 2017

Du

ratio

n c

on

trib

ution

(ye

ars

)

Source: Janus Henderson Investors, as at 31 December 2017.

Government bond

holdings

• Australia 30y

• Canada 5y

• 30y Euro interest

rate swaps

• Spain 30yr

• Portugal 7yr, 30yr

• US 5yr

• Japan Inflation-

linked

Targeted approach to duration

Global Fixed Interest Total Return Strategy (duration)

Page 30: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

29

Secured credit offers uncorrelated opportunities

0.5

-0.2

0.5 0.8

1.2 1.4

-2.4 -2.6

-2.3

-1.8

-2.2

-2.7

-1.5

0.6

1.7

-3.5

-2.5

-1.5

-0.5

0.5

1.5

2.5

ABS Loans Corporate bonds Global Govt High yield

Source: Janus Henderson Investors and Bloomberg, as at 31 December 2017.

Note: Based on total return of the following – ABS and Loans show returns on fund sleeve holdings. Government Bonds- BoA Merrill Lynch G7 Government Index (hedged to

USD); Corporate Bonds- BoA Merrill Lynch Global Corporate Bond Index (hedged to USD); High yield Corporate Bonds - BoA Merrill Lynch Global High Yield Index

(hedged to USD).

% Q2 2013 “Taper Tantrum” Q2 2015 Q4 2016 “Trump Reflation”

Floating rate resilience during rates market volatility

Page 31: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

30

0 50 100 150

B

BB

BBB

A

AsiaEMEALatAm

EM Credit pays you for better fundamentals

Spread per turn of leverage by rating

0 20 40 60 80

B

BB

BBB

A

EM

US

Source: BofA Merrill Lynch Global Research, as at December 2017.

Credit rating Credit rating

Investors get a better compensation for holding EM balance sheet risk

Page 32: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

31

A truly global portfolio

5yr Canadian Gov’ts

US steepener

Argentine provinces Nigeria telecoms

Spain & Portugal

30yr Gov’ts

European secured loans

Long NOK vs EUR

Euro Financials

Long CZK vs CHF

Egypt Gov’ts 30yr Australia Gov’ts

Long SOEs &

property developers

Selective US

high yield

Long UK non

conforming ABS

Page 33: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

The more things change,

the more they stay the same:

Global Equity Income

Andrew Jones

Portfolio Manager, Global Equity Income

Page 34: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

33

The importance of dividends

John D. Rockefeller

“Do you know the only thing that gives me pleasure? It’s to see my

dividends coming in.”

Jane Austen

“A large income is the best recipe for happiness I ever heard of.”

Benjamin Graham

“The prime purpose of a business corporation is to pay dividends

to its owners.”

Image source: John D. Rockefeller: https://en.wikipedia.org/wiki/John_D._Rockefeller.

Benjamin Graham: https://en.wikipedia.org/wiki/Benjamin_Graham.

Jane Austen: https://writersinspire.org/writers/jane-austen.

Page 35: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

34

Synchronised GDP growth

Revision of G10 growth forecasts over time

Consensus G10 real GDP growth forecasts (YoY %)

Source: Bloomberg consensus forecasts, as at 31 December 2017.

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2011 2012 2013 2014 2015 2016 2017 2018

2012

2013

2014

2015

2016

2017

2018

Page 36: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

35

Valuations and earnings growth

Earnings growth

From downgrades to upgrades

Source: Datastream, Bloomberg, IBES, as at January 2018.

*Japan EPS numbers refer to the fiscal year (ending March Y+1).

2017 EPS growth figures are forecasts.

Region 12m forward

valuations

EPS Growth

(%)

PE

(x)

DY

(%) 16 17F 18F

Japan* 15 1.9 12 14 30

Eurozone 14 3.5 4 10 9

US 19 2.2 2 11 13

UK 14 4.2 -2 22 7

EM 12 2.4 8 23 13

Global 16 2.6 3 15 10

MSCI World EPS growth forecasts (% YoY)

Source: Citi, as at February 2018.

-7%

-2%

3%

8%

13%

18%

2014 2015 2016 2017 2018

2015 2016

2017

2018

2019

Page 37: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

36

0

10

20

30

40

50

60

70

80

90

100 Current payout (%)

Median payout (%) since 1970

Payout ratios by region

Source: Citi Research – Global Equity Strategy, as at 31 December 2017.

*Median shown since 1996.

CEEMEA: Central Eastern Europe Middle East & Africa; DM: Developed Markets.

Yields may vary and are not guaranteed. Forecasted figures are projected estimates based on Factset consensus data.

Pa

yo

ut ra

tio

(%

) The global equity income environment

Payout ratios are broadly in line with history

Page 38: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

37

Janus Henderson Global Dividend Index

Long-term study of global dividend trends

• Analyses dividends paid by the world’s

top 1,200 firms by market capitalisation.

• Base year of 2009 and report based in

US$.

• Global dividends rose 7.7%* in 2017.

Global dividends (US$)

Source: Janus Henderson Investors, as at 19 February 2018.

Note: * Headline growth. Underlying growth was +6.8%.

Past performance is no guarantee of future results.

Bill

ions (

$)

730 779

948

1,025 1,059

1,173 1,153 1,154

1,252

1,348

-

200

400

600

800

1,000

1,200

1,400

1,600

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018e

Page 39: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

38

The importance of dividends

Higher yielding stocks, with growing dividends, have outperformed

Source: Thomson Reuters and Datastream, as at 25 January 2018.

Note: Rebased to 100, as at 30 June 1995. Past performance is no guarantee of future results.

0

100

200

300

400

500

600

700

800

1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017

MSCI World Total Return Index

MSCI World High Dividend Yield Total Return Index

Performance of dividend yielders to broad market

+664%

+454%

Re

ba

se

d r

etu

rn

Page 40: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

39

0

2

4

6

8

10

12

14

16

18

<1%

1%

-2%

2%

-3%

3%

-4%

4%

-5%

5%

-6%

6%

-7%

7%

-8%

8%

-9%

9%

-10

%

10

%-1

5%

15

%-2

0%

Forecast yield

Realised yield

Higher yield can be illusory

Avoid value traps

Source: Société Générale Cross Asset Research, as at 31 December 2017.

Note: Yield and forecasts relate to the period 1995 to 31 December 2017.

*Janus Henderson Global Equity Income team generally focus on, but is not limited to, stocks yielding 2% – 6%.

Estimated versus realised yield by dividend yield level

Realised yield lower

than market forecasts

Team’s focus yield range*

Page 41: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

40

Distribution of global equity income

MSCI World by Dividend Yield

392

467

323

207

108

75 62

0

50

100

150

200

250

300

350

400

450

500

<1 % 1%-2% 2%-3% 3%-4% 4%-5% 5%-6% >6%

Source: Factset, as at 26 January 2018.

Nu

mb

er

of co

mp

an

ies

Dividend yield

Page 42: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

41

Not everything has done well

Global value versus growth

75

80

85

90

95

100

105

80

85

90

95

100

105

110

2009 2010 2011 2012 2013 2014 2015 2016 2017

Value

outperforming

Value

underperforming

Source: Bloomberg, as at December 2017, MSCI World Value and Growth Indices.

Note: Rebased to 100, at 31 December 2009.

Page 43: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

42

European financials have lagged

European banks and German bond yields

Source: Bloomberg, as of 31 December 2017.

Note: Stoxx 600 ex-UK Bank Index rebased to 100, 31 December 2017.

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

1.0

60

70

80

90

100

110

120

Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17

Stoxx Europe Bank Sector (Index, LHS)

German 10yr government bond yield (%, RHS)

Page 44: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

43

Energy: dividends attractive

“Our intent remains to offset any ongoing scrip dilution.”

“Achieving goals to cashflow neutrality at $40.”

“Future dividends will be settled entirely in cash.”

“Free cashflow increase at $50.”

“Maintaining discipline to continue to reduce breakeven.”

Source: Respective company websites.

Note: References made to individual securities should not constitute or form part of any offer or solicitation to issue, sell, subscribe or purchase the security.

Page 45: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

44

Energy: dividends attractive

-15,000

5,000

25,000

45,000

65,000

85,000

105,000

125,000

Restructuring and return improvement

Source: Redburn, as at October 2017.

Note: *Free cash flow of 7 major oil companies.

Source: ISHN.com.

Org

an

ic fre

e c

ash

($

m)*

Page 46: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

45

The more things change, the more they stay the same

• Macro backdrop supportive

• Higher yield doesn’t mean better yield

• Focus on cashflow and dividend growth

Page 47: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

Passive aggressive:

Global Emerging Markets

Glen Finegan

Head of Global Emerging Market Equities

Ian Tabberer

Portfolio Manager,

Global Emerging Market Equities

Page 48: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

47

Glen Finegan

Head of Global Emerging Market Equities

17 years’ experience

Nicholas Cowley

Portfolio Manager

20 years’ experience

Michael Cahoon

Portfolio Manager

7 years’ experience

Stephen Deane

Portfolio Manager

10 years’ experience

Ian Tabberer

Portfolio Manager

16 years’ experience

Janus Henderson Global Emerging Markets

Boutique culture – Edinburgh based

Source: Janus Henderson Investors, as at 31 December 2017.

• Average 14 years’ industry

experience.

• Leverage Global Equities

team.

• Long-term performance track

records based on a consistent

approach.

Page 49: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

48

Emerging Markets demographics look attractive…

Most population growth will come from less developed regions

0

1

2

3

4

5

6

7

8

9

10

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Least developed regions

Less developed regions

More developed regions

Source: United Nations, Department of Economic and Social Affairs, Population Division (2017).

Note: World Population Prospects: The 2017 Revision, DVD Edition. Total Population, both sexes, using medium fertility. Definition for ‘More developed regions’ and ‘Less

developed regions’ can be found at https://esa.un.org/unpd/wpp/Download/Standard/Population/.

Population (billions)

Page 50: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

49

…but not all EM countries offer the same opportunity

MSCI Emerging Markets regional breakdown

Source: Janus Henderson Investors and Datastream, as at 31 December 2017.

United Nations, Department of Economic and Social Affairs, Population Division (2017). World Population Prospects: The 2017 Revision, DVD Edition. Total

Population, both sexes, using medium fertility. Definition for ‘Less developed regions’ can be found at https://esa.un.org/unpd/wpp/Download/Standard/Population/

Regions as defined by Janus Henderson Investors. LatAm (Latin America) includes Caribbean. EM = Emerging Markets.

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

0%

10%

20%

30%

40%

50%

SE Asia(inc. South

Korea)

GreaterChina

LatAm Africa Middle East India EasternEurope (inc.

Russia)

■ MSCI EM Index weights (%) (LHS)

■ % of regional population to ‘Less developed regions’ population (LHS)

■ 10 year CAGR population % (2017-2027) (RHS)

Page 51: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

50

0%

5%

10%

15%

20%

25%

30%

35%

Indices follow but don’t lead

MSCI Emerging Markets country breakdown in

■1992 ■2017

and 2017 1992

Source: MSCI, as at 31 December 1992 and 31 December 2017.

Note: Others includes: Colombia, Czech Republic, Egypt, Hungary, Pakistan, Peru, Poland, Qatar and UAE.

Page 52: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

51

Who controls the index?

Exposure to State Owned Enterprises

73%

27%

Private SOE

Source: Janus Henderson Investors, MSCI, as at 31 December 2017.

Note: Private, SOE (State Owned Enterprises) as defined by Janus Henderson Investors.

MSCI EM Index

Page 53: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

52

We back owners and entrepreneurs for the long-term

Greatview Aseptic

“Mobile and internet technology not only has

fundamentally changed our life…but also presents

historic opportunities to the PRC to surpass others…The

PRC dairy industry has tightly and closely connected to

the world’s stage…Traditional manufacturing sector must

embrace the new generation with innovation.

We, Greatview, have been pursuing innovation for new

business opportunities.”

First item level traceable milk

cartons using QR codes

Quote source: http://www.greatviewpack.com/info/list2288b7a1dc9042aeb2efd004b895df3f_2.html.

Image source: https://www.foodbev.com/news/best-new-brand-or-business-at-world-dairy-innovation-awards/.

Note: References made to individual securities should not constitute or form part of any offer or solicitation to issue, sell, subscribe or purchase the security.

Jeff Bi, Co-Founder, Chief Executive Officer and Executive Director

Page 54: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

53

…that have strong track records and alignment

Source: 1 http://forbesindia.com/printcontent/20732. 2 https://www.forbes.com/profile/charlene-de-carvalho-heineken/gallery/3.

3 http://www.adityabirla.com/media/press-reports/its-now-or-never . 4 http://www.quinenco.cl/esp/directores.php.

Note: References made to individual securities should not constitute or form part of any offer or solicitation to issue, sell, subscribe or purchase the security.

Deepak Parekh1

Chairman of HDFC India’s leading housing

finance company

Seek and you shall find!

Kumar Mangalam Birla3

Chairman of Grasim

Industries, UltraTech

Cement, Idea Cellular and

Aditya Birla Capital

Charlene de Carvalho-

Heineken2

Executive Director of

Heineken Holdings

Jean-Paul Luksic4

Chairman of Antofagasta

and Vice Chairman of

Quinenco Chilean business family with

interests across the economy

Page 55: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

54

Positioning: regions and countries

Janus Henderson Global Emerging Markets Equity Fund

0

5

10

15

20

25

30

35 FundBenchmark

Regional exposure Country exposure %

Source: Janus Henderson Investors, as at 31 December 2017.

Benchmark: MSCI Emerging Markets Index (net dividends reinvested) in AUD.

Note: MSCI country classifications standard used to determine country classifications.

The above is for illustrative purposes only and should not be misconstrued as advice.

Americas, 24%

Asia Pacific, 42%

EMEA,

26%

Cash, 7%

Page 56: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

55

Not all emerging markets are “Emerging”

• The Janus Henderson Global Emerging Markets Equities

strategy is bottom-up and benchmark unaware.

− The Benchmark gives an illusion of safety.

− 50% of the Benchmark is Greater China and South

Korea.

Large parts of the world are still developing markets.

The long-term Global Emerging Markets opportunity

remains UNCHANGED.

Benchmark: MSCI Emerging Markets Index (net dividends reinvested) in AUD.

Page 57: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

THANK YOU

Page 58: WELCOME Knowledge Exchange 2018€¦ · Head of Global Emerging Market Equities Ian Tabberer Portfolio Manager, Global Emerging Market Equities Conclusion Matt Gaden Head of Distribution

57

Contact us

• Visit www.janushenderson.com/australia

Matt Gaden

Head of Distribution, Australia

Jordan Tang

Head of Retail Distribution

Gary Horton

Institutional Sales Director

Amy Barron

Retail Sales Director (NSW)

Harry Wall

Head of Client Account Management

Tom Kelly

Retail Sales Director (QLD)

Charles Horan

Senior Client Account Manager

David Livera

Retail Sales Director (VIC/WA/TAS)

Fawzul Ahmed

Client Account Manager

John Negri

Retail Sales Director (VIC/SA)

Mark Fensom

Client Account Manager

Daniel Simpson

Business Development Associate


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