global investing name title company date is it time to relocate some of your portfolio?
TRANSCRIPT
GLOBAL INVESTING
Name
TitleCompany
DATE
IS IT TIME TO RELOCATE SOME OF YOUR PORTFOLIO?
AGENDA
HAVING A GLOBAL PERSPECTIVE
THE BACKYARD BIAS
2.
3.
1.
GLOBAL GROWTH OPPORTUNITIES
THE BACKYARD BIAS
CANADIANS HAVE A BACKYARD BIAS
CANADIANS HAVE THE MAJORITY OF THEIR ASSETS INVESTED IN CANADA
Source: IFIC mutual fund assets, as of June 30, 2011. Includes Equity, Balanced and Fixed Income Mutual Fund Assets.
OutsideCanada
38%
OutsideCanada
38% Canada62%
Canada62%
0
20
40
60
80
100
120
140
160
180
200
Jan-02 Oct-02 Jul-03 Apr-04 Jan-05 Oct-05 Jul-06 Apr-07 Jan-08 Oct-08 Jul-09 Apr-10 Jan-11 Oct-11 Jul-12
YOU CAN’T BLAME THEM
World
Canada
CANADA HAS OUTPERFORMED THE WORLD MARKET OVER THE PAST 10 YEARS
Source: Morningstar, Canada as represented by the c, World as represented by MSCI World Index in Canadian Dollars. January 1st, 2002 to December 31 2012. The chart above is for illustrative purposes only.
-10% 0% 10% 20% 30% 40%
Energy
Materials
Financials
Industrials
Consumer Discretionary
Consumer Staples
Health Care
Information Technology
Telecom. Services
Utilities
CANADA’S STRONG PERFORMANCE
CONCENTRATION IN 3 SECTORS HAS HELPED PERFORMANCE OVER THE PAST 10 YEARS
3 SECTORS: • 76% of Canadian
market
Source: Morningstar, as of December 31st, 2012.
Source: Yahoo Finance. Bank of CanadaDecember 31, 2002 to February 27, 2013
0
2000
4000
6000
8000
10000
12000
14000
16000
0
0.2
0.4
0.6
0.8
1
1.2
12/31/2002 12/12/2003 11/26/2004 11/10/2005 11/21/2006 11/14/2007 10/28/2008 10/13/2009 9/27/2010 9/12/2011 8/27/2012
Canadian Dollar
S&P/TSX
CANADA’S STRONG PERFORMANCE
RISE IN DOLLAR HAS MIRRORED RISE IN MARKET
-20% -10% 0% 10% 20%-10% 0% 10% 20% 30% 40%
Energy
Materials
Financials
Industrials
Consumer Discretionary
Consumer Staples
Health Care
Information Technology
Telecom. Services
Utilities
PEFORMANCE FACTORS CHANGE
Source: Morningstar, as of December 31st, 2012
CANADIAN CONCENTRATION IN 3 SECTORS HAS HURT PERFORMANCE.
4 SECTORS: • 9% of Canadian
market• 43% of U.S.
market• Positive
performance YTD
2012 Return: 4.16% 2012 Return: 13.4%
3 SECTORS: • 76% of Canadian
market • Negative
performance YTD
Sector Weight Sector Performance
0.0
0.2
0.4
0.6
0.8
1.0
1.2
Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13
PEFORMANCE FACTORS CHANGE
Source: Bank of Canada as of January 4th, 2010 to March 1st, 2013 .
CANADIAN DOLLAR HAS STABILIZED
-20%
-15%
-10%
-5%
0%
5%
10%
15%
1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
LONG TERM TREND
CANADA OUTPERFORMS
WORLD OUTPERFORMS
HISTORICALLY CANADIAN OUTPEFORMANCE LED TO LONGER LARGER GLOBAL OUTPERFORMANCE
Difference between S&P/TSX Total Return Index and MSCI World Index ($Cdn) rolling 5 year periods, as of November 30, 2011Source: Morningstar, S&P/TSX Total Return Index and MSCI World Index ($Cdn). The S&P / TSX Total Return Index and MSCI World Index is unmanaged and unavailable for direct investment. Assumes reinvestment of capital gains and dividends and no taxes. Index past performance is not indicative of future results. For illustrative purposes only.
HAVING A GLOBAL PERSPECTIVE
TALE OF TWO WORLDS
WORLD BASED ON GEOGRAPHIC SIZE
WORLD BASED ON ECONOMIC SIZE
Source: As of 2008, CIA Factbook for GDP data. Economic size based on GDP Growth Rate. Natural Earth website for shapefiles of the world.
CANADA’S SMALL GLOBAL FOOTPRINT
CANADA2%
CANADA2%
SMALL PERCENTAGE OF THE WORLDS LARGEST AND MOST RECOGNIZABLE COMPANIES BASED ON THE FORTUNE GLOBAL 500 LIST ARE IN CANADA
Source: Fortune Global 500, 2012.
REST OF THE WORLD
REST OF THE WORLD
6 LARGEST COMPANIES IN THE WORLD ARE LARGER THAN THE ENTIRE CANADIAN MARKET
SMALL GLOBAL FOOTPRINT
MARKET CAPITALIZATION IN 000’S
Source: Moringstar, Financial Times Global 500Canadian Market Cap as of December 31st, 2012, Company’s market cap as of December 31st, 2012.
$0
$300,000
$600,000
$900,000
$1,200,000
$1,500,000
$1,800,000
$2,100,000
$2,400,000
6 Largest Companies Canada
$2,700,000
GLOBAL GROWTH OPPORTUNITIES
DIVERSIFY BY GEOGRAPHY
THE BEST PERFORMING COUNTRIES CHANGE FROM YEAR TO YEAR2012
Source: Paltrack, Dynamic Funds. All Indices are represented in Canadian dollarsMexico – BMV IPC. U.S. – S&P 500 Total Return. England – FTSE 100 Total Return. Canada – S&P/TSX Total Return.
Germany – FSE DAX Total Return. Brazil – BOVESPA. France - Euronext Paris CAC 40 PR. Japan – Nikkei 225 Average PR. Hong Kong – Hang Seng Hong Kong Composite.
20102009200820072006200520042003
c
2011
c
2002
CPP HAS GONE GLOBAL
CANADIAN PENSION PLAN INVESTS THE MAJORITY OF THEIR EQUITY PORTFOLIO OUTSIDE OF CANADA
Source: Canadian Pension Plan Annual Report, as of March 31, 2012.
Emerging Markets
Foreign Developed Markets
Canadian Equities
U.S. CORPORATE REVENUE IS DIVERSIFIED
U.S. COMPANIES EARN A SIGNIFICANT AMOUNT OF REVENUE OUTSIDE THE U.S.
OutsideU.S. In the
U.S.
Source: RBC Economics, % of revenue of S&P 500 Companies.
AND CORPORATE PROFITS ARE GROWING
Source: U.S. Department of Commerce, Bureau of Economic Analysis.
U.S. CORPORATE PROFITS
0
500
1,000
1,500
2,000
2,500
2007q1 2007q3 2008q1 2008q3 2009q1 2009q3 2010q1 2010q3 2011q1 2011q3 2012q1 2012q3
In b
illio
ns
HOWEVER U.S. STOCKS REMAIN CHEAP
PRICE TO EARNINGS LEVELS OF THE S&P 500
Source: Morningstar, November 30th 1999 to December 31st,2012.
0
5
10
15
20
25
30
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
0
50
100
150
200
250
2010 2020
Source: Euromonitor International “Top 10 largest economies in 2020” July 7, 2010
OPPORTUNITY IN EMERGING MARKETS
MILLIONS
NUMBER OF HOUSEHOLDS IN CHINA WITH DISPOSABLE INCOME ABOVE $10,000 U.S.
THE RISE OF THE DOMESTIC CONSUMER
U.S. India and China0
5
10
15
20
25
Source: US Bureau of Economic Analyses, China Auto Review, Society of Indian Automobile Manufacturers
MILLIONS
INDIA AND CHINA PURCHASED 2.35x MORE PASSENGER VEHICLES THAN THE U.S. IN 2012
OPPORTUNITY IN EMERGING MARKETS
Sources: McKinsey & Co. report "Preparing for China's urban billion" March 2009
OPPORTUNITY IN EMERGING MARKETS
CHINA WILL BUILD ENOUGH SKYSCRAPERS TO FILL 10 NEW YORK-SIZED CITIES BY 2025
World Total
Brazil, Russia, China, India
Advanced Economies
0.0 1.5 3.0 4.5
2013-2018 2019-2025
Source: The Conference Board Global Economic Outlook 2013, January 2013 update
EMERGING MARKETS SET TO DRIVE ECONOMIC GROWTH
FORECASTED GDP GROWTH
YOU’RE ALREADY A GLOBAL INVESTOR
Volvo
Automobile
Fiat
Mitsubishi
Volkswagen
Hyundai/Kia
Mazda
Honda
Toyota
Nissan
Mercedes
BMW
Ford
Chrysler
GM
Kitchen
Miele
Siemens
Bosch
Jenn-Air
Kitchenaid
Maytag
Whirlpool
Frigidaire
Electrolux
Computers
eMachines
Gateway
Acer
Dell
Apple
HP
Lenovo
Wireless Phone
Motorola
HTC
Nokia
Samsung
Blackberry
Iphone
Entertainment
Toshiba
Yamaha
Bose
Sharp
Sony
LG
Panasonic
Samsung
IMPORTANT INFORMATION
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in units value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated
Views expressed regarding a particular company, security, industry or market sector should not be considered an indication of trading intent of any funds managed by Goodman & Company, Investment Counsel Ltd. These views are not to be considered as investment advice nor should they be considered a recommendation to buy or sell.
This document is not to be distributed or reproduced without the consent of Goodman & Company, Investment Counsel. Dynamic Funds is a division of Goodman & Company, Investment Counsel Ltd.