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TRANSCRIPT
Threadneedle Asia Fund
Vanessa Donegan March 2011
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Agenda
Threadneedle Asia Equity Team
Investment process
Market background and outlook
Portfolio positioning and performance
Appendix
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01Threadneedle Asia Equity Team
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Life and pension funds
Sovereign wealth funds
Asia equity flagship fund
Threadneedle China Opportunities Fund
$6.8 billion1 managed in Asia (ex. Japan) equities
Asian TeamInvestment expertise
Wealth of experience
Specialist knowledge
Role of fund manager and analyst combined
Dynamic and pro-active style
Proven track records
Consistent performance
1 Source: Threadneedle as at 31 December 2010
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Asian TeamInvestment expertise
Source: Threadneedle as at 30 September 2010
Dedicated Specialist Expertise
George GosdenDeputy Head ofAsia ex. Japan17 years’ experience
Gigi ChanFund Manager10 years’ experience
Natasha EbtehadjInvestment Analyst2 years’ experience
Lisa LimInvestment Analyst3 years’ experience
Rafael PolatinskyFund Manager6 years’ experience
Vanessa DoneganHead of Global Emerging Market and Asia ex. Japan Equities
Douglas CairnsInvestment Specialist17 years’ experience
Therese NiklassonHead of SRI6 years’ experience
Daniel BelchersCommodity Analyst9 years’ experience
David DonoraHead of Commodities29 years’ experience
Agnes BelaischHead of Emerging Market Strategy14 years’ experience
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02Investment process
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What do we believe?
Careful monitoring of risk benefits our
clients
Different investment styles outperform at different stages of
the investment cycle
Attracting and retaining bright
people who enjoy sharing ideas is key
Single, shared investment platform
leads to outperformance
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Strong interconnection
Role of fund manager and analyst combined
Advantages of a single location
Benefits of global sector overlay
Team members incentivised to pool ideas
Asia Team fully integrated into Threadneedle process
Focus on teamwork
Source: Threadneedle as at 30 September 2010
Government and Corporate Bond Team
Global Sector Teams
Regional Equity Team
Strategy Team
Asia Team
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Matrix approach
TaiwanTechnologyMaterials (shared)
George Gosden
IndonesiaConsumerNatasha Ebtehadj
IndiaKoreaAustralia (shared)
Energy (shared)Materials (shared)Industrials (shared)
Rafael Polatinsky
MalaysiaSingaporeThailandPhilippines
HealthcareTelecomsIndustrials (shared)
Lisa Lim
Hong KongChina
Energy (shared)Utilities
Gigi Chan
Australia (shared)BanksInsurance
Vanessa Donegan
GeographySector
Source: Threadneedle as at 30 June 2010
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Our approach in Asia – an integrated process
Portfolio construction and managementIdea generation
650+ companies (MSCI Asia Pacific Index) plus off benchmark opportunities
Ind
ex s
cree
nin
gCompany meetings
Macro and themes
Regional teams
Global sector teams
Assessment
‘Core list’ of c.80 names
Industry analysis
Valuation
Management quality
Economic, credit and ESG overlay
Stock selection Portfolio
Mandatory stocks must be held
Accountability
Risk management
Reports and monitoring
Style analysis
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Investment process Sources of idea generation
Company meetingsc.500 individual company contacts per yearRegional visitsMain source of idea generation for teamExcellent access to senior management as one of UK’s largest investors in region
Regional TeamsStock ideas from country specialistsWeekly stock meetings, screening
Global Sector TeamsInput from Global Sector specialist analysts, regular Global Sector meetings to encourage flow of ideas between equity and credit teams
Macro and themesMonthly economics and themes meetingsFocus on identifying sources of structural changeEconomics meetings to set investment context utilising views of specialist economics team
Information is common, ideas are scarce
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Finding alpha – field work is crucial
623 company meetings conducted in 2010
67 Hong Kong
11 Philippines
623Total
4 Other
18 Thailand
20 Malaysia
36 Singapore
36 Korea
40 India
46 Australia
51 Taiwan
52 Indonesia
242 China
Company meetingsCountry
Source: Threadneedle as at 27 January 2011
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Investment themes
Asset reflation
Services
Domestic Asia
Wealthmanagement
Trading up
Commodities
Demographics
InfrastructureClean techDigital
highway
Conglomerates
Ag-flation
Inflation pulse
Automation
Technology
M&ACorporate spending
Global recovery
Distributors Substitutes
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Investment themes stock exampleIndustrial automation
Rising Chinese wages and strong corporate capex leading to investment surge in automation technologies
Theme highlighted in monthly Themes and Industrial Global Sector meetings
Delta Electronics – Taiwanese electronics manufacturer expanding into provision of Industrial automation equipment. 22% ROE 5% dividend yield
Source: HSBC Investment Banking as at 30 August 2010
Industrial robot penetration
0
50
100
150
200
250
300
350
400
Japan US Germany SouthKorea
Italy China France IndiaIn
stal
led
units
of i
ndus
tria
l rob
ots
('000
s)
2009 2012E
15
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Source: Merrill Lynch as at 31 March 2010. Data as at end of 2008
Passenger car penetration
Rising disposable income to drive auto demand from low base
Fund plays this theme
Astra International – dominant share in Indonesia’s cars and two wheelers market
Maruti Suzuki – leading auto brand in India
Dongfeng Motor – top auto producer in China with three strategic partners
Hyundai Motor – dominant share in Korea, gaining share in US, India and China
LG Chemical – global leader in hybrid vehicle technology
0
50
100
150
200
250
300
350
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010U
nits
per
'000
per
sons
Korea Taiwan Japan China Indonesia
16
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16Portfolio strategy applied
Themes Stocks
Domestic AsiaTencent, Astra International, New Oriental Education, CTRIP, Genting, Hong Kong Exchange
Corporate spendingDelta Electronics, Hyundai Heavy, Samsung Engineering, Samsung Electronics, Taiwan Semiconductor
InfrastructureChina National Building, Larsen & Toubro, BHEL, Rio Tinto, BHP Billiton
Inflation pulseWharf, Swire Pacific, Li & Fung, LG Chem, Formosa Plastics, China Yurun, Noble Group
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Stock selectionConsistent framework for fundamental analysis
Valuation analysis
Economic profitPERP/BHOLTLoved / unloved
Economic, credit and ESG view
Utilising views and strengths of other teams
Industry analysis
SWOT analysisFranchisesProfit outlook
Management quality
Regular contact with senior decision makers
Relative to history, sector and global peers
Benefits of integrated approach
Fundamental research Can they deliver?
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Portfolio construction Turning high conviction ideas into high conviction portfolios
Focused research
Conviction assessment
ValuationStock ideas pitched at weekly meetings
Risk assessment
Volatility Sector / country riskESG score
Liquidity assessment
Daily volume analysis by dedicated dealing team
Obligatory overweight positions in our best
research ideas
Core list
Conviction buy ideas
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Portfolio construction Threadneedle Asia Fund risk parameters
Underpins a disciplined investment process
Limits volatility
Ensures diversificationUpper quartilePerformance target
+/- 8%Relative sector weightings
+/- 3%Relative stock weightings
3 - 6%Tracking error range
Threadneedle Asia Fund’s constraints
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Sample daily risk report
Monitoring and risk control – multiple checks
Fund Managers and Compliance use LatentZero Sentinel to ensure constraints are respected
Continuous independent review of portfolio risk by Investment Risk team, employing
Review of active risk
Stress tests
Effective style analysis
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03Market background and outlook
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Outlook – economic growth in Asia remains well supported
Consumption supported by low interest rates
Rising capacity utilisation will support investment spending
Asian currencies are under upward pressure
Risk of capital inflows causing instability
Upside risk to inflation from rising commodity prices
Source: Thompson DataStream as at 31 December 2010
60
80
100
120
140
160
180
200
Dec 08 Apr 09 Aug 09 Dec 09 Apr 10 Aug 10 Dec 10
MSCI AC World Index – Price Index
MSCI AC Asia Pacific ex Japan Index – Price Index
23
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Emerging economies are slowing, not stalling
Threadneedle GDP forecasts
Source: Threadneedle as at 31 January 2011
0.2%
-5.0%-4.0%
-2.4%
1.6% 1.5%
2.9%
7.4%
9.1%
-5.2%
4.5%
6.0%
8.4%
3.5%
9.8%
6.0%
3.0%
1.5%1.4%1.0%
6.2%
4.2%
9.2%8.3%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
Korea Indonesia India China Japan UK Europe US
2009 2010E 2011E
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24
Asia ex Japan CPI
Source: UBS as at 31 January 2011
Food prices driving up core inflation … oil a key risk
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Asia (ex. Japan) Core CPI YoY Asia (ex. Japan) Food CPI YoY
25
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25
US ISM Index suggests stable export growth
Source: Credit Suisse as at 31 January 2011
Outlook for Asian exports
20
25
30
35
40
45
50
55
60
65
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
ISM
-30%
-20%
-10%
0%
10%
20%
30%
40%
Exp
ort
US ISM manufacturing composite (lag by 6m) Non-Japan Asia export (3MMA YoY)
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Source: CEIC, BNP Paribas estimates as at 21 February 2011. For China’s fixed investment, growth rates are in nominal terms, due to the absence of data, while for other markets, forecasts are in real terms
Fixed investment
Fixed investment growth in Asia is accelerating
Source: FactSet consensus estimates, MSCI, BNP Paribas as at 21 February 2011
Non-financial corporate capex as % of sales
-3%
0%
3%
6%
9%
12%
15%
18%
21%
24%
Ch
ina
Ind
ia
Ind
on
esi
a
Th
aila
nd
Ma
lays
ia
Ta
iwa
n
Ko
rea
Sin
ga
po
re
Ph
ilip
pin
es
(YoY
)
Trend (2005–2010E CAGR) 2011E 2012E
8.0%
8.5%
9.0%
9.5%
10.0%
10.5%
11.0%
11.5%
12.0%
12.5%
13.0%
2002 2003 2004 2005 2006 2007 2008 2009 2010E
(% o
f sal
es)
MSCI Asia ex-Japan AXJ ex-China
China decelerating
Higher growth vs. trend
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27
Banking system loan growth
Source: Credit Suisse as at 28 February 2011
Asian credit cycle broadening out
-5%
0%
5%
10%
15%
20%
25%
30%
35%
China Hong Kong India Indonesia Singapore Malaysia Thailand Taiwan Korea Australia
2009 YoY 2010 YoY
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Source: Merrill Lynch as at 31 March 2010. Data as at end of 2008
Mortgage lending as % of GDP
Rapid urbanisation supports mortgage demand
Demand for luxury goods is exploding
Changing consumption patterns support demand for new services
Penetration of financial products is low
Asian consumers are relatively underleveraged
Rising middle class supports consumption growth
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
UK
US
Ta
iwa
n
Ho
ng
Ko
ng
Sin
ga
po
re
Ma
lays
ia
Ko
rea
Ch
ina
Th
aila
nd
Ind
ia
Ind
on
esi
a
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Ample potential for income growth
Per capita consumption is growing rapidly…
Source: BNP Paribas as at 31 October 2010
0
200
400
600
800
1,000
1,200
1,400
1,600
1985 1989 1993 1997 2001 2005 2009
($)
China India Indonesia
…but from a low base
Source: BNP Paribas as at 31 October 2010. Per capita consumption 2009
0
5
10
15
20
25
30
35
US
Fra
nce
Ge
rma
ny
Jap
an
UK
Ho
ng
Sin
ga
po
reK
ore
aT
aiw
an
Bra
zil
Me
xico
Ma
lays
ia
Ind
on
esi
aC
hin
aIn
dia
($ in
'000
s)
GDP per capita
Source: BNP Paribas as at 31 October 2010
100
1,000
10,000
100,000
1990 1996 2002 2008 2014 2020 2026
(Log
sca
le in
$)
China IndonesiaIndia Japan
China in 2009 = $3,680;roughly Japan in 1973
Japan, 1952–1994
30
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30
Source: Goldman Sachs as at 31 August 2010
China GDP breakdown
-0.41.2 1.4 1.8 1.8 1.5 1.0 0.7 0.9 1.8 1.6 1.6 1.2 1.0
5.34.7
2.33.0
4.0 3.52.7 3.0 2.9 3.1 2.5 3.5 3.9
3.0 3.9 3.4 3.4
6.0 3.4
1.7
1.9 4.1 4.4 6.3 5.5 4.45.6
6.0
4.6
8.6
4.4
0.0
0.6
4.1 1.3
-0.1
1.2
0.0
2.02.6
0.9 0.0
1.31.2 1.2
2.11.8
5.4
0.1 0.6 2.6
-4.3
0.2
10.9 10.0
9.37.8 7.6
8.4
8.39.1
10.0 10.111.3
12.714.2
9.6 9.110.1
9.0
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E 2011E
pp
co
ntr
ibu
tio
n t
o G
DP
gro
wth
Government consumption Private consumption Fixed investment Net exports GDP
Forecasts
31
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Source: BNP Paribas as at 30 November 2010
Government debt
Indonesia – positive macro environment
Beneficiary of strength in commodities
Stable currency and structurally lower inflation
Sovereign debt re-rating
Falling cost of credit
Public and private sectors have deleveraged0
10
20
30
40
50
60
70
80
90
100
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Central Government Debt Average yearly Rating
BBB
B+
BB
CC
(% o
f G
DP
)
(S&
P o
utlo
ok)
CCC+
32
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Source: Deutsche Bank as at 30 November 2010
Strong GDP and income growth
Indonesian consumption growth
Underpenetrated and young population of 240 million
4th largest market in terms of consumption within Asia ex-Japan
Strong wage growth
Low household debt ratio0
1,000
2,000
3,000
4,000
5,000
6,000
2000 2010F 2015F($
)
0
10
20
30
40
50
60
Million people
GDP / capita (LHS) Income above $4,500 / annum (RHS)
33
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Source: UBS as at 30 November 2010. Calendar convention: 2009 is fiscal year to March 2010
Contribution to GDP growth (UBS estimates, pp)
India's growth firmly on a recovery path
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E 2011E 2012E
0%
2%
4%
6%
8%
10%
12%
Consumption Gross Investment Net Exports GDP
Forecast
34
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Indian infrastructure planned spend
Regional investment themeRising infrastructure spend
0
50
100
150
200
250
300
350
400
9th Plan(FY 97–FY 02)
10th Plan(FY 02–FY 07)
11th Plan(FY 07–FY 12)
($ in
bill
on)
Airports IrrigationPorts PowerRailways RoadsTelecom Urban infrastructure and housing
Favourable demographics
High savings rates
Rising middle class
Underdeveloped infrastructure
Source: Plan documents, CIDC draft paper for construction sector in 11th Plan, UBS
35
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35
Source: DataStream as at 31 January 2011. All data quoted in local currency
Asia country performance over last 18 months
90
100
110
120
130
140
150
160
Jul 09 Sep 09 Nov 09 Jan 10 Mar 10 May 10 Jul 10 Sep 10 Nov 10 Jan 11
Reb
ased
MSCI Asia Pacific ex Japan MSCI China MSCI Thailand MSCI IndonesiaMSCI Singapore MSCI Hong Kong MSCI Korea MSCI Taiwan
MSCI India MSCI Australia
36
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Source: I/B/E/S, DataStream, CLSA Asia-Pacific Markets as at 31 January 2011
MSCI Asia ex Japan 12-month forward P/E
Asian valuations are undemanding
Source: I/B/E/S, DataStream, CLSA Asia-Pacific Markets as at 31 January 2011
MSCI Asia ex Japan 12-month forward P/E relative to MSCI US 12-month forward P/E
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
7.0
8.5
10.0
11.5
13.0
14.5
16.0
17.5
19.0
20.5
22.0
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
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37
% of stocks with dividend yields greater than respective country short-term rates
Source: UBS as at 30 August 2010
Dividend growth supportive of domestic investor participation
0%
10%
20%
30%
40%
50%
60%
70%
80%
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
38
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Source: OECD, Goldman Sachs Research estimates as at 30 November 2009
Share of major economies in global GDP 1800–2050E
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1800 1850 1900 1950 2000 2020E 2050E
% o
f wor
ld G
DP
North America Western Europe Russia Latin America Japan China India ROW
Asian economies, in particular AEJ
will become significantly more
important in the global economy
39
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04Fund positioning and performance
39
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40
Threadneedle Asia Fund vs. MSCI AC Asia Pacific ex. Japan Index
Source: Threadneedle as at 31 January 2011. TIP includes Thailand, Indonesia and the Philippines. Excludes Cash at 1.5%, US at 0.7%, UK at 0.1% and Europe at 0.3%
Threadneedle Asia FundGeographic breakdown
20.6
%
8.4%
7.8%
3.4%
2.5%4.
3% 5.1%
3.0%
0.0%
14.4
%
13.5
%
9.9%
17.1
%
0.3%
7.3%
14.9
%
25.7
%
12.5
%
8.8%
18.1
%
0%
5%
10%
15%
20%
25%
30%
China South Korea Australia Hong Kong Taiwan India TIP Singapore Malaysia New Zealand
Threadneedle Asia Fund Index
41
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41
Threadneedle Asia Fund vs. MSCI AC Asia Pacific ex. Japan Index
Source: Threadneedle as at 31 January 2011. Excludes Cash at 1.5% and unclassified at 0.4%
Threadneedle Asia FundSector breakdown
17
.8%
15
.3%
13
.2%
12
.0%
11
.8%
7.4
%
5.7
%
4.5
%
3.0
%
3.0
%
2.9
%
0.8
%
0.8
%
19
.9%
14
.0%
13
.7%
9.4
%
6.7
%
7.1
%
7.6
%
2.6
% 4.4
% 5.8
%
4.7
%
2.7
%
1.4
%
0%
5%
10%
15%
20%
25%
Banks InformationTechnology
Materials Industrials ConsumerDiscretionary
Real Estate Energy DiversifiedFinancials
Insurance ConsumerStaples
Telecoms Utilities Health Care
Threadneedle Asia Fund Index
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42
Source: Threadneedle as at 31 January 2011. Active position is relative to the MSCI AC Asia Pacific ex. Japan Index. The mentioning of any specific share is not a recommendation to buy
Threadneedle Asia Fund’s active positions
Top 10 holdings
Sector Fund (%)
Samsung Electronics Information Technology 4.6
BHP Billiton Materials 3.7
Rio Tinto Materials 3.0
CNOOC Energy 2.9
Taiwan Semiconducters Information Technology 2.8
Aust & Nz Bank Financials 2.2
Hyundai Mobis Consumer Discretionary 1.9
China Construction Bank Financials 1.9
LG Chem Materials 1.8
Hyundai Consumer Discretionary 1.8
Top 10 overweight positions
Sector Active (%)
Rio Tinto Materials 2.0
CNOOC Energy 1.8
Samsung Information Technology 1.7
Hyundai Mobis Consumer Discretionary 1.5
Swire Pacific Financials 1.4
LG Chem Materials 1.3
Li & Fung Consumer Discretionary 1.3
Ping An Insurance Financials 1.3
Samsung Engineering Industrials 1.3
State Bank of India Financials 1.2
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Market capitalisation ($m)
43
Threadneedle Asia FundAn attractive risk / reward profile
Threadneedle Asia Fund offers focused exposure to Asia, holding c.100 stocks compared with 673 in the MSCI Asia ex Japan Index
Threadneedle Asia Fund also offers attractively priced growth
Average
11.2x
2012PER
2010PER
2011PER
Historic Book Price
Gross dividend
yield
31 January 2011 19.5x 12.6x 2.5x 2.0%
Source: Threadneedle as at 31 January 2011
0%
10%
20%
30%
40%
50%
60%
70%
80%
10,000+ 1,000–10,000
350–1,000
0–350
Cash
Fund Index
44
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44
Asia ex Japan market performance from lows to peaks
Source: MSCI, Citi Investment Research & Analysis. Calculations based on MSCI Asia Pacific ex Japan Index
The three phases of Asian market recovery
0%
50%
100%
150%
200%
250%
300%
350%
400%
0 6 12 18 24 30 36 42 48 54 60
Dec 74 Nov 82 Nov 87 Sep 90 Aug 98 Mar 03 Feb 09 Median (1974–2003)
Months after trough
P/BV, P/Sales, P/CF work best
Earnings rev, P/E, Fcst net margin
Price momentum, Earnings rev
Phase 1 Phase 2 Phase 3
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45
Asia ex Japan Price to Book – large vs. small cap premium
Source: MSCI, Citi Investment Research & Analysis. Calculations based on MSCI Asia ex Japan Index
Large capitalisation stocks cheap relative to history
0%
50%
100%
150%
200%
250%
300%
350%
400%
450%
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
46
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Source: Merrill Lynch Asia Pacific Quantitative Strategy
Asia Pacific style relative performance – 2010
Investment style analysis – Asia ex Japan region
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
Value Growth Quality Risk Momentum Dividend Smallsize
Per
form
ance
rel
ativ
e to
MS
CI A
sia
Pac
ific
ex
Japa
n
Style Skylines™ show benchmark-relative Style Tilts™. Sample Size Adjusted Tilts, calculated from both the size and breadth of portfolio positions, assess the deliberateness of the Tilts and enable comparisons across portfolios of differing structures. Additional analysis factors, sector (and country) adjustments and Tilt Contribution reports may also be informative.
Portfolio Style Skyline™
-2.0-2.3
0.2
-0.2
-1.3
-0.6
1.92.4
1.01.5
0.61.0 0.9 1.0 0.9 0.7
-1.2
0.5
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
Bo
ok
to P
rice
Div
ide
nd
Ea
rnin
gs
Yld
C'F
low
Yie
ld
Sa
les
to P
rice
EB
ITD
A to
Rtn
on
Eq
uity
Ea
rnin
gs
Inco
me
/Sa
les
Sa
les
Gro
wth
IBE
S 1
2M
th
IBE
S 1
Yr
Re
v
Ma
rke
t Ca
p
Ma
rke
t Be
ta
Mo
me
ntu
m
Mo
me
ntu
m
De
bt/E
qu
ity
Fo
reig
n
Style factors
Sty
le T
ilt™
47
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+6.5%-9.7%-3.4%-3.3%-2.1%Relative return
80
3.3%
1.1%
3 months
Cumulative performance
90
9.8%
-0.9%
3 years
34
57.2%
67.4%
5 years
88
23.8%
19.6%
1 year
90
17.4%
13.5%
6 months
Percentile rank
Peer group median
Threadneedle Asia Fund
Source: Morningstar as at 31 January 2011. All data is quoted in $ in S&P Offshore & International Universe. Fund data is quoted on a bid to bid basis with gross income re-invested at bid. Fund data is gross of tax and net of fees
Threadneedle Asia FundPerformance in the S&P Offshore & International Universe ($)
48
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-1.8%
3.3%
1.4%
3 months
Cumulative performance
-6.5%
12.3%
5.0%
3 years
+8.0%
67.5%
80.8%
5 years
-2.3%
24.7%
21.8%
1 year
-2.1%
16.9%
14.4%
6 months
Relative return
MSCI AC AP ex Jap (Chain Linked with BEMI pre 1999)
Threadneedle Asia Fund
Threadneedle Asia FundPerformance vs. MSCI AC AP ex. Japan Index ($)
Source: Morningstar / Thompson / DataStream as at 31 January 2011. All data is quoted in $. Gross performance from 31 March 2010 onwards is based on daily cash flows and valuations, from 1 January 2008 to 31 March 2010 based on Global Close prices, and prior to January 2008 based on 12pm prices. Fund data is quoted on a bid to bid basis with gross income re-invested at bid. Fund returns calculated Gross of TER (and Tax) for comparison with index
49
PL01/11/231
73
-2.3%
18.5%
15.8%
2004
27
+2.3%
46.0%
49.3%
2003
44
+1.4%
-8.6%
-7.3%
20021
9
+7.4%
30.4%
40.1%
2006
+1.3%+11.8%-7.8%+1.3%-3.5%Relative return
89
17.6%
13.4%
2010
Annualised performance
5
33.7%
49.4%
2007
36
19.4%
20.9%
2005
83
-49.9%
-53.8%
2008
38
67.2%
69.4%
2009
Percentile rank2
Peer group median
Threadneedle Asia Fund
Source: Morningstar as at 31 December 2010. All data is quoted in $ in S&P Offshore and International Universe. Fund data is quoted on a bid to bid basis with gross income re-invested at bid. Fund data is gross of tax and net of fees1 Fund Manager start date 28 February 20022 A fund with performance placing it in the first decile ranks amongst the best 10% in the peer group during a specified period
Threadneedle Asia FundPerformance in the S&P Offshore and International Universe ($)
50
PL01/11/231
-5.1%
23.0%
16.7%
2004
+2.6%
48.7%
52.6%
2003
-1.1%
-5.1%
-6.2%
20021
+1.9%
21.0%
23.3%
2005
-2.7%
18.4%
15.2%
2010
Annualised performance
+10.5%
37.2%
51.5%
2007
+7.1%
33.2%
42.7%
2006
-2.8%
-51.6%
-53.0%
2008
-0.9%
73.7%
72.1%
2009
Relative return
MSCI AC AP ex Jap (Chain Linked with BEMI pre 1999)
ThreadneedleAsia Fund
Threadneedle Asia FundPerformance vs. MSCI AC AP ex. Japan Index ($)
Source: Morningstar / Thompson / DataStream as at 31 December 2010. All data is quoted in $. Gross performance from 31 March 2010 onwards is based on daily cash flows and valuations, from 1 January 2008 to 31 March 2010 based on Global Close prices, and prior to January 2008 based on 12pm prices. Fund data is quoted on a bid to bid basis with gross income re-invested at bid. Fund returns calculated Gross of TER (and Tax) for comparison with index1 Fund Manager start date 28 February 2002
51
PL02/11/160
+2.6%-10.5%-5.0%-3.1%-2.2%Relative return
54
3.6%
1.3%
3 months
Cumulative performance
54
39.0%
24.4%
3 years
23
81.9%
86.6%
5 years
57
27.8%
21.4%
1 year
59
14.9%
11.3%
6 months
Percentile rank
Peer group median
Threadneedle Asia Fund
Source: Morningstar as at 31 January 2011. All data is quoted in £ in S&P UK Unit Trusts / OEICs Universe. Fund data is quoted on a bid to bid basis with gross income re-invested at bid. Fund data is gross of tax and net of fees
Threadneedle Asia FundPerformance in the S&P UK Unit Trusts / OEICs Universe (£)
52
PL02/11/160
-1.8
3.1%
1.3%
3 months
Cumulative performance
-6.5
39.4%
30.3%
3 years
+8.0
85.8%
100.7%
5 years
-2.3
24.8%
21.9%
1 year
-2.1
14.3%
11.9%
6 months
Relative return
MSCI AC AP ex Jap (Chain Linked with BEMI pre 1999)
Threadneedle Asia Fund
Threadneedle Asia FundPerformance vs. MSCI AC AP ex. Japan Index (£)
Source: Morningstar / Thompson / DataStream as at 31 January 2011. All data is quoted in £. Gross performance from 31 March 2010 onwards is based on daily cash flows and valuations, from 1 January 2008 to 31 March 2010 based on Global Close prices, and prior to January 2008 based on 12pm prices. Fund data is quoted on a bid to bid basis with gross income re-invested at bid. Fund returns calculated gross of TER (and Tax) for comparison with index
53
PL01/11/230
62
-1.2%
8.3%
7.0%
2004
45
+0.8%
33.8%
34.9%
2003
32
+1.6%
-17.9%
-16.6%
20021
14
+5.0%
17.1%
22.9%
2006
+1.3%+8.8%-5.3%0.0%-3.7%Relative return
82
22.8%
18.3%
2010
Annualised performance
17
34.6%
46.4%
2007
33
33.8%
35.5%
2005
76
-32.9%
-36.5%
2008
50
52.5%
52.5%
2009
Percentile rank2
Peer group median
Threadneedle Asia Fund
Source: Morningstar as at 31 December 2010. All data is quoted in £ in S&P UK Unit Trusts / OEICs Universe. Fund data is quoted on a bid to bid basis with gross income re-invested at bid. Fund data is gross of tax and net of fees1 Fund Manager start date 28 February 20022 A fund with performance placing it in the first decile ranks amongst the best 10% in the peer group during a specified period
Threadneedle Asia FundPerformance in the S&P UK Unit Trusts / OEICs Universe (£)
54
PL01/11/230
-5.1%
14.7%
8.9%
2004
+2.6%
33.7%
37.2%
2003
-1.1%
-14.2%
-15.2%
20021
+1.9%
35.3%
37.9%
2005
-2.7%
22.1%
18.8%
2010
Annualised performance
+10.5%
34.9%
49.0%
2007
+7.1%
16.8%
25.2%
2006
-2.8%
-33.0%
-34.9%
2008
-0.9%
54.6%
53.3%
2009
Relative return
MSCI AC AP ex Jap (Chain Linked with BEMI pre 1999)
Threadneedle Asia Fund
Threadneedle Asia FundPerformance vs. MSCI AC AP ex. Japan Index (£)
Source: Morningstar / Thompson / DataStream as at 31 December 2010. All data is quoted in £. Gross performance from 31 March 2010 onwards is based on daily cash flows and valuations, from 1 January 2008 to 31 March 2010 based on Global Close prices, and prior to January 2008 based on 12pm prices. Fund data is quoted on a bid to bid basis with gross income re-invested at bid. Fund returns calculated Gross of TER (and Tax) for comparison with index1 Fund Manager start date 28 February 2002
55
PL01/11/195
Reasons for underperformance in 2010
Overweight China
Overweight large cap stocks
Overweight technology sector during Q1
Underweight Taiwan in Q4
Also underweight small cap ASEAN
56
PL11/09/188
APAppendix – Biographies
56
57
Vanessa is Head of Asia and Global Emerging Markets. In addition to her leadership role, Vanessa has analytical responsibility for the banking and insurance sectors across the region and shares responsibility for Australia and the materials sectors. Vanessa began her career in 1981 with Grieveson Grant Stockbrokers where she progressed to manage Far Eastern investments. She joined Allied Dunbar Asset Management in 1986, where she was responsible for the management of Far Eastern funds. Allied Dunbar Asset Management became part of Threadneedle in 1994. Vanessa holds a degree in classics from Oxford University.
Threadneedle start date: 1994
Industry start date: 1981
VANESSA DONEGAN
Biography
58
PL1/09/245
George Gosden joined Threadneedle in 2010 as a senior fund manager on the Asian Equities team. He is the deputy head of the team and has research responsibility for the technology sector and the markets of Taiwan and Korea. He also manages a number of institutional portfolios.
Prior to joining Threadneedle, George was a Director at Insight Investment, where he managed retail and institutional funds for the Asian and International equity teams. He previously managed Asian equities at Clerical Medical and Equitable Life. George has MA in Economic Development & International Trade and a BA in Economics from the University of Nottingham.
Threadneedle start date: 2010
Industry start date: 1994
GEORGE GOSDEN
Biography
59
Gigi Chan joined Threadneedle in 2000 and is a Fund Manager specialising in Asian Equities.
She manages the Threadneedle China Opportunities Fund and the Allied Dunbar Far East Asia ex-Japan Fund. She is also a member of the oil & gas and consumer products global sector research teams and has country research responsibilities for China and Hong Kong.
Gigi graduated from St Hilda’s College, Oxford with a degree in Politics, Philosophy and Economics. She also holds a postgraduate diploma in law from the London College of Law and is a CFA Charterholder.
Threadneedle start date: 2000Industry start date: 2000
GIGI CHAN
Biography
60
PL01/10/228
Rafael Polatinsky joined Threadneedle in 2007 as a fund manager on the Asian equities team. He is manager or deputy manager on a number of Asia Pacific and Emerging Market institutional mandates, and also manages the Threadneedle India Fund. His research responsibilities include the Indian market and the energy and materials sectors. Rafael started his career at Arthur Andersen in South Africa, before joining Deutsche Bank in London.
Prior to joining Threadneedle, he was an investment analyst / deputy fund manager on the Asian emerging markets team at WestLB Mellon Asset Management. Rafael holds a Bachelor of Accounting degree and a Bachelor of Commerce degree from the University of Witwatersrand, Johannesburg, and is also a Chartered Accountant (South Africa) and a CFA charterholder.
Threadneedle start date: 2007
Industry start date: 2001
RAFAEL POLATINSKY
Biography
61
Natasha Ebtehadj joined Threadneedle in 2008 as a graduate trainee and has now assumed responsibility for the consumer and industrials sectors and the Indonesian market for the Asia Pacific equity team. She has a Masters degree in Modern Chinese Studies from Oxford University and a BSc in Economics & Politics from Warwick University. She is currently a CFA Level 2 candidate.
Threadneedle start date: 2008
Industry start date: 2008
NATASHA EBTEHADJ
Biography
62
PL09/08/040
Lisa Lim joined Threadneedle in 2007. She is an analyst covering Malaysia, Singapore, Thailand and the Philippines as well as the healthcare and telecoms sectors.
She graduated from the University of Cambridge with a PhD in engineering in 2007 and an MA (first class honours) in Manufacturing Engineering Tripos in 2000. Lisa is also a CFA Charterholder.
Threadneedle start date: 2007
Industry start date: 2007
LISA LIM
Biography
63
PL11/08/135
Douglas Cairns joined Threadneedle in 2007 and is responsible for providing detailed information on Threadneedle’s capabilities and investment views, particularly with regard to Asia and Emerging Markets, to clients and consultants.
Douglas started off his career in the financial sector as an Analyst in Corporate Finance for Bankers Trust Company. He then moved to Schroder Investment Management where he started as a UK Equity Analyst and was promoted internally to UK Institutional Pension Fund Manager. Douglas moved to Thailand, with Schroder’s, to take up the role of Chief Investment Officer in Thailand from 1996 to 2001. In 2002 he was promoted to Chief Executive Officer.
From 2002 to 2007 Douglas was self-employed as a consultant and speaker and also is a published author.
He has a Masters degree from Edinburgh University, is a qualified pilot and flying instructor and also holds the Investment Management Certificate.
Threadneedle start date: 2007Industry start date: 1989
DOUGLAS CAIRNS
Biography
64
09x/07/036
Important notes
Past performance is not a guide to future returns. The value of investments and any income from them is not guaranteed and may fall as well as rise. Exchange rate movements could increase or decrease the value of underlying investments/holdings. The dealing price of the funds may include a dilution adjustment, further details are available in the Prospectus.
Threadneedle Investment Funds ICVC (“TIF”) and Threadneedle Specialist Investment Funds ICVC (“TSIF”) are open ended investment companies (OEICs) with variable capital and limited liability incorporated in England and Wales under registered No. IC000002 (TIF) and No. IC000232 (TSIF). TIF and TSIF are subject to UK law and are authorised by the Financial Services Authority (FSA) with effect from 18. June 1997 (TIF) and from 9 May 2003 (TSIF). TIF and TSIF comply with the UCITS Directive 85/611/ EEC (as amended by directives 2001/107/EC and 2001/108/EC). The investment manager is Threadneedle Asset Management Limited.
References in this document to any fund do not constitute an offer or invitation to subscribe to shares in such a fund. Subscriptions to a fund may only be made on the basis of the current Prospectus or Simplified Prospectus and the supplement as well as the annual or interim report. Copies can be obtained free of charge on request.
The mention of any specific shares or bonds should not be taken as a recommendation to deal and anyone considering dealing in these financial instruments should consult a stockbroker or financial adviser. The research and analysis included in this document has been produced by Threadneedle for its own investment management activities, may have been acted upon prior to publication and is made available here incidentally. In some instances the information contained in this publication, other than statements of fact, was obtained from external sources believed to be reliable but its accuracy or completeness cannot be guaranteed. Any opinions expressed are made as at the date of publication but are subject to change without notice.
The information provided in this presentation is for the sole use of those intermediaries attending the presentation. It may not be reproduced in any form without the express permission of Threadneedle 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.
Index returns assume reinvestment of dividends and capital gains and unlike fund returns do not reflect fees or expenses. The index is unmanaged and cannot be invested in directly.
The Threadneedle China Opportunities Fund and Threadneedle Asia Fund invest in emerging markets, which may carry risk associated with failed or delayed settlements of market transactions and with registration and custody of settlements. Emerging markets are generally less well regulated than in the UK, and may involve a higher risk. The funds can make investments in derivatives and there are additional risks associated with this type of investment.
Threadneedle Asset Management LimitedRegistered in England and WalesRegistered no. 57320460 St Mary AxeLondon EC3A 8JQ
Threadneedle Investments is a brand name and both the Threadneedle name and logo are trademarks or registered trademarks of the Threadneedle group of companies.
For investment professional use only
Not for onward distribution too, or to be relied upon by private investors.