Professional Documents
Culture Documents
11 April 2015
Investment-Linked Foreign Edge
Funds:
The world is your financial Edge
√ DIVERSIFY : Don’t put all your eggs in one basket. The
world is full of great investment opportunities to meet your
financial goals. Zurich now gives you more choices to tap into
these investment opportunities by adding to its stable of local
funds, three foreign Edge funds.
India
China
M’sia
Global
Source: Bloomberg as at 31/1/2015. In US$ terms. Past performance is not indicative of future performance.
Investments in foreign equities are subject to high market risks, comprising equity and currency exchange rate risks. Please refer to fund factsheet and brochure
for more information. 4
It is time to invest offshore!
Plenty of investment opportunities outside of
Malaysia not to be missed
Malaysian companies do not have scale vs China, India and the
World Stock Market % of Global Market No. of Companies in
Region Cap* Capitalization Global Fortune 500^
(US$mil)
*Source : MSCI as at 27 February 2015. All figures in USD. Global = MSCI World; China = MSCI China; India = MSCI India; Malaysia = MSCI Malaysia
^ Source: Fortune 500 as at July 2014
5
Diversify: The way forward
In a world full of investment potential and uncertainties,
diversification is the way forward
EPF foreign
investments has gone
up from 10% in 2010
to 23% of assets as at
end-December 2014
(Source: EPF, The Star,
10/2/15 pdf attached)
Adobe Acrobat
Document
Growing number
of foreign
investment-
linked funds
6
Invest in China, India and
Global Equities
- Plenty of attractive
opportunities
By:
Josephine Lip
Head of Intermediary Sales
Schroder Investment Management
11 April 2015
INTERNAL USE ONLY
Invest in China, India and Global
Equities
Contents
1. Why Invest in China and India?
2. Why Invest in Global Equities?
3. Who is Schroders?
8
1. WHY INVEST IN CHINA &
INDIA?
9
Why Invest in China & India?
3 Key Benefits
1
Capture the strong and continuous growth
potential of the two fastest growing
economies of the world
2
Gain from the positive demographic
trends and rising incomes which
provide strong support for consumption
growth
3
Reap potentially attractive returns from
the Chinese and Indian stock markets that
are presenting attractive entry points
10
1. Capture potential from the
world’s fastest growing
economies
China & India are able to grow faster, while fiscal positions continue to
improve
GDP Growth Forecasts – China and India vs US and the China & India’s stronger fiscal position2
World1 Fiscal balance (% of GDP, 2014 forecast)
4
9.0%
% yoy
8.0% 2
7.0%
0
6.0%
-2
5.0%
4.0% -4
3.0%
-6
2.0%
-8
1.0%
0.0% -10
China India US World 0 50 100 150 200 250
2013 2014 2015 (F) Gross government debt (% of GDP, 2014 forecast)
1.
Sources: International Monetary Fund as at July 2014, Datastream as at 31 December 2014.
2.
Sources: Bloomberg as at 8 September 2014. International Monetary Fund, World Economic Outlook Database, as at April 2014 (latest).
11
1. Capture potential from the world’s fastest
growing economies
Pro-reform governments are favourable for the economic outlook in both China &
India
China’s Reform Roadmap
Despite lowering the GDP growth target, the Chinese government is
committed to stabilising growth and supporting employment
One-child
One-child Policy
Policy Reform
Reform
Hukou
Hukou Reform
Reform
Interest Service
Service Sector
Sector
Interest Rate
Rate Demand
Liberalization Demand Boost
Boost Deregulation
Deregulation
Liberalization
Slower
Slower Land
Land Monetization
Monetization
Local
Local Govt
Govt
Growth
Growth Consumer
Consumer Credit
Credit
Debt
Debt Control
Control
Deleveraging
Deleveraging
Price
Price Reform
Reform
Government
SOE
SOE Reform
Reform
Better
Better Government
Deregulation
Deregulation
Structure
Structure Increase SOE
SOE Reform
Reform
Increase
Productivity
Productivity Hukou
Hukou Reform
Reform
Anti-Corruption
Anti-Corruption
Source: Citi Research, July 2014. Photo of Premier Xi JinPing from Getty Images
Environment
Environment Protection
Protection
12
1. Capture potential from the world’s fastest
growing economies
Pro-reform governments are favourable for the economic outlook in both China &
India
India’s new government has boosted investor’s confidence with steps taken
to improve ease of doing business
13
2. Gain from positive demographics + rising
household income
Dramatic trends in spending power from a growing middle class
• In China, the number of households earning over US$35,000 in real terms will triple to almost 80 million
by 2022. China will have more households with this earning power in 2022 than Japan.
• India is forecasted to grow 2.5 times in this category bringing the number of households to more than 10
million from the current 4 million.
World’s share of disposable household income – Households with an income greater than US$35,000
China’s share increasing
14
2. Gain from positive demographics + rising
household income
Strong support for consumption growth – the numbers are BIG!
India’s trends in consumption is rising China India
strongly supported by a young & working Population1 1,393,783,840 1,267,401,850
age population with rising income per World Rank 1 2
capita
India’s Consumption Growth (% y-y)
10.0 Youth Population2 356,000,000 269,000,000
9.0 World Rank 2 1
8.0
7.0
6.0 Internet Users3 641,601,070 243,198,922
5.0 World Rank 1 3
4.0
3.0
Mobile Phone Users4 1,276,660,000 970,955,980
2.0
World Rank 1 2
1.0
0.0
FY93
FY94
FY95
FY97
FY99
FY00
FY02
FY03
FY06
FY07
FY08
FY09
FY11
FY12
FY14
FY96
FY98
FY01
FY04
FY05
FY10
FY13
FY15E
FY16E
15
2. WHY INVEST IN GLOBAL
EQUITIES?
16
Why Invest in Global Equities?
3 Key Benefits
1
Global growth environment in 2015 will remain supportive of
global equities
2
Divergence in global growth creates attractive pockets
of opportunities
3
Valuation of global equities remain
attractive with further potential for upside
17
1. Global growth in 2015 supportive of global
equities
Led by a buoyant consumer in the United States
Falling unemployment, improving Higher wages signals a buoyant US
current account and improving trade consumer
balance
18
2. Divergence in growth => attractive
opportunities
Positives for Europe: Lower oil prices, monetary stimulus by European Central
Bank, and boost to exports from weaker Euro
Brent Oil Spot Prices Euro/USD movement (good for Europe)
€ /US$
1.40
1.36
1.32
1.28
1.24
1.20
1.16
1.12
19
3. WHO IS SCHRODERS?
20
Schroder’s Capabilities in Asian Equities
Strong in regional presence and resources
Sydney
Opened 1963
Melbourne
Opened 2007
Investment office
Source: Schroders as at 31 March 2015 Representative office
*For the year 2014
^A joint venture fund management company with Axis Asset Management Company
# including China A-shares managed by Schroders only
21
Schroder’s Capabilities in Asian Equities
Asian funds and ratings
Source: Schroders as at 28 February 2015. Rating refers to Morningstar rating as at 28 February 2015
22
Schroder’s Capabilities in Asian Equities
Award-winning funds with proven track record
The Edge-Lipper Fund Awards 2014
Schroder Asian Growth Fund
Best Fund Over 3 Years – Equity Asia Pacific Ex Japan
Schroder Asian Growth Fund
Best Fund Over 5 Years – Equity Asia Pacific Ex Japan
Schroder ISF Korean Equity
Best Fund Over 3 Years – Equity Korea
Justin Abercrombie
Head of QEP Global Investment Team
Set up team in 1996; Lead Portfolio Manager
22 years of experience
Product Executives
24
INTRODUCING ZURICH CHINA EDGE
FUND
25
Zurich China Edge Fund
Fund Structure
IL Fund
Schroder ISF
IL Policy Zurich China China
Holders Edge Fund Opportunities
Target Fund
IL Fund Manager Target Fund’s
Investment Manager
26
Zurich China Edge Fund
Objective, style and universe
Objective
To provide capital growth primarily through
investment in equity and equity related securities of
companies with substantial business exposure to the
People's Republic of China.
Risk Profile
- High, comprising of China equity risk and foreign
currency (US$, Renminbi) risk
* Investment style and universe of the target Schroder ISF China Opportunities Fund
27
Target Schroder Fund Performance
A 4-star rated fund with consistently top quartile ranking
Schroder China Fund Performance as at 28 February 2015
Since
3 mths 6 mths YTD 1 year 3 years 5 years inceptio
n
% % % % % % %
Schroder ISF China
Opportunities 4.9 4.1 3.7 12.9 23.4 29.0 179.1
*Offshore and International Funds – Greater China Equity Universe (The quartile is based on Schroder ISF China Opps Class A (Acc))
Benchmark: Morgan Stanley Capital International (MSCI) China Net Total Return Index
Source: Schroders and Morningstar as at 28 February 2015. Returns quoted are based on NAV to NAV prices of the Fund, in USD, net of fees, with net income re-invested. Inception
date: 17 February 2006. Past performance is not indicative of future returns.
28
INTRODUCING ZURICH INDIA EDGE
FUND
29
Zurich India Edge Fund
Fund Structure
IL Fund
Target Fund
IL Fund Manager Target Fund’s
Investment Manager
30
Zurich India Edge Fund
Objective, style and universe
Objective
To provide capital growth primarily through
investment in equity and equity related
securities of Indian companies.
Risk Profile
- High, comprising of India equity risk and foreign
currency (US$, Rupee) risk
* Investment style and universe of the target Schroder ISF Indian Equity Fund
31
Target Schroder Fund Performance
Delivered strong absolute returns over 1, 3 and 5 years and since
inception
Schroder India Fund Performance as at 28 February 2015
Since
3 mths 6 mths YTD 1 year 3 years 5 years inception
In USD, net of fees % % % % % % %
Schroder ISF Indian
Equity Fund 6.3 14.1 8.4 39.4 48.3 51.5 74.6
Source: Schroders. Returns quoted are based on A Accumulated Share Class, in USD, dividend re-invested, net of fees. Inception date: 10 November 2006.
Benchmark: Morgan Stanley Capital International (MSCI) India Net Total Return Index
Source of fund ratings: Citywire, Trustnet and Morningstar, as at 28 February 2015. Fund ranking information refers to A Acc share class and is based on Morningstar’s universe –
Offshore and International Funds: India Equity. Past performance is not indicative of future returns.
32
INTRODUCING ZURICH GLOBAL
EDGE FUND
33
Zurich Global Edge Fund
Fund Structure
IL Fund
Schroder ISF
IL Policy Zurich Global QEP Global
Holders Edge Fund Quality
Target Fund
34
Zurich Global Edge Fund
Objective, style and universe
Objective
To provide capital growth primarily through
investment in equity and equity related
securities of companies worldwide whose
financial characteristics show high quality
attributes.
Risk Profile
- High, comprising of global equity risk and foreign
currency risk
* Investment style and universe of the target Schroder ISF Indian Equity Fund
35
Target Schroder Fund Performance
A 4-star rated fund
36
Zurich Edge Investment-Linked
Funds:
The world is your financial Edge
Zurich Edge
Malaysian Funds Foreign Funds*
Zurich Vulture Fund Zurich China Edge Fund Diversify and
Zurich Growth Fund Zurich India Edge Fund harness the full
potential of
Zurich Dana Mas Maju Zurich Global Edge Fund your
Zurich Billion Cap Fund investments –
right now !
Zurich Balanced Fund
Zurich Dana Mas Yakin
Zurich Income Fund
Zurich Dana Seri Mulia
38
ZURICH FOREIGN
EDGE FUNDS
39