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I was born in a small town

I was born in a small town. Mark Cliff Investment Specialist. Part of the PSG Group, an investment holding company listed on the JSE (Investment Banks: PSG) PSG Group has interests in companies which operate in Financial Services, Banking, Agriculture, Education and Private Equity

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I was born in a small town

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  1. I was born in a small town

  2. Mark Cliff Investment Specialist

  3. Part of the PSG Group, an investment holding company listed on the JSE (Investment Banks: PSG) PSG Group has interests in companies which operate in Financial Services, Banking, Agriculture, Education and Private Equity Second fastest growing company over the last 10 years on the JSE Sunday Times Top 100 Companies over 10 Years 2012 Founded in 1996 with a current market capitalization R10.7billion

  4. Manage more than R16billion in assets under management (March 2013) 8 Local Unit Trusts 2 Offshore Unit Trusts Various Pension Monies Team of 7 award-winning portfolio managers supported by a analysts

  5. Investing Offshore – A World of Opportunity

  6. Why Invest Offshore over the long-term? Geographical diversification Greater opportunity set (more industries & companies) therefore more opportunities and more diversification Exposure to industries and markets not otherwise available locally Currency diversification There will be times when SA assets will be expensive and better opportunities can be found elsewhere

  7. Why invest offshore? Performance since 2000 OPPORTUNITY Source: Bloomberg, I-NET

  8. Why invest offshore? JSE FINDI P/E ratio VS S&P 500 P/E ratio JSE trading at 30% premium JSE trading at 50% discount Source: Bloomberg, I-NET Offshore opportunities are very attractively priced compared to local valuations.

  9. Why invest offshore? The ZAR 2002-01-02 R12.50 Source: Bloomberg

  10. Why invest offshore? The ZAR Source: XE.com

  11. Why invest offshore? The ZAR Source: XE.com

  12. Cumulative flows to global mutual funds ($bn) Source: IMG Global Financial Report October

  13. The Great Rotation?

  14. The Current Opportunity

  15. The yield curve of opportunity Source: Bloomberg, I-Net, PSGAM.

  16. The yield curve of opportunity Source: Bloomberg, I-Net, PSGAM.

  17. The yield curve of opportunity Source: Bloomberg, I-Net, PSGAM.

  18. Some Global Opportunities

  19. Rating the Retailers

  20. Rating the Retailers

  21. Shoprite in Africa

  22. Tesco across the Globe

  23. Rating the Retailers Tesco PE compared to Shoprite PE OPPORTUNITY Source: Bloomberg

  24. The Battle of the Banks

  25. The Battle of the Banks

  26. Introduction: Pharmaceuticals The Pharmaceutical industry is the most research intensive industry globally R&D successes are rewarded by massive revenues Patent protection provides strong (though temporary) barriers to entry: Patents expiry lead to swift entry of generic competition (Pfizer’s US Lipitor sales of >$5bn expected to fall by 90%) Patents are worthless if product unsafe (Merck shares fell 33% when Vioxx was withdrawn)

  27. Introduction: Pharmaceuticals S&P 500 US Pharmaceutical Index

  28. Introduction: Roche World’s largest biotech company 13 products/product lines with sales > CHF1bn Number one supplier of in vitro diagnostics 20% global market share Leader in personalised health care Combines pharmaceutical and diagnostics divisions Focus on “developed world” diseases Oncology Immunology Neuroscience Metabolism Infectious disease Diabetes Diagnostics Personalised Healthcare

  29. Roche: No New Kid on the Block

  30. Diversified Earnings

  31. Emerging Markets offer good prospects

  32. Roche: Offering good value

  33. Volkswagen AG

  34. VW Group

  35. VW Group: Revenue

  36. VW Group: Revenue

  37. VW Group – Bright Future • Scale: 11.4% of global passenger car market • Trusted brands - safe, reliable, fuel efficient, engine performance, service • Two very important contributors to sales resilience during recession: • Spread of product offering across price brackets • Geographical mix, large emerging market exposure • €6bn research and development budget • 10 brands feeding off one large R&D pool • Massive growth in Emerging Markets

  38. VW Group: Bright Future

  39. But what about SA?

  40. How we think about risk Probability of Outcome Expected Return

  41. Mind the Gap Source: Bloomberg, PSGAM.

  42. Top 10 Holdings: 31 December 2012 Source: PSG Asset Management Research – PSG Flexible Fund data

  43. Conclusion What will be right for you must be determined between you and your Financial Advisor There are opportunities domestically, but more so offshore It is always a good thing to diversify globally There are a lot of advantages of having offshore in your portfolio Now is a good time to buy

  44. Questions

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