00:00 HAVE YOU CONSIDERED INVESTING IN A PART OF … · Tyre Manufacturer Consumer discretionary -...
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1. Size The Australian sharemarket represents less than 2% of world markets based on market capitalisation. Figure 2: ASX20 domination of ASX200 Source: ASX200list.com – market cap data as at 1 March 2019 180 COMPANIES 20 COMPANIES Figure 1: Market capitalisation (USD millions) as at 31 January 2019 AUSTRALIA 1,351,432 SWITZERLAND 1,527,206 GERMANY 1,867,444 UNITED KINGDOM 3,826,890 HONG KONG EXCHANGES 5,628,463 JAPAN 4,083,941 CHINA* 6,699,187 US – NASDAQ 10,662,317 NYSE (US) 22,464,237 Source: World Federation of Exchanges. *Shanghai + Shenzhen SE Technological innovations, such as electric cars, artificial intelligence and machine learning, have created new industries, many of which are being developed outside Australia. 3. Diversification (and concentration) As well as being small, the Australian share market is dominated by a small number of large companies. As illustrated in Figure 2, the top 20 companies comprise nearly 55% of the market capitalisation of the S&P/ASX200 index, with many of these companies confined to a small number of sectors, such as financials and resources. Investing globally delivers access to a broader range of sectors and companies, providing diversification benefits to investors’ portfolios. Why invest beyond Australia’s shores? HAVE YOU CONSIDERED INVESTING IN A PART OF EVERYDAY LIFE? 00:00 24:00 2. Demographic trends In developed markets, the population is ageing, a trend that creates a growing need for aged care facilities, in-home support, pharmaceuticals and wide-ranging medical services. In emerging markets, the rising middle class has a seemingly insatiable appetite for consumer goods, while rapid urbanisation creates demand for materials and energy.
Transcript of 00:00 HAVE YOU CONSIDERED INVESTING IN A PART OF … · Tyre Manufacturer Consumer discretionary -...
1. SizeThe Australian sharemarket represents less than 2% of world markets based on market capitalisation.
Figure 2: ASX20 domination of ASX200
Source: ASX200list.com – market cap data as at 1 March 2019
180 COMPANIES
20 COMPANIES
Figure 1: Market capitalisation (USD millions) as at 31 January 2019
AUSTRALIA 1,351,432
SWITZERLAND 1,527,206
GERMANY 1,867,444
UNITED KINGDOM 3,826,890
HONG KONG EXCHANGES 5,628,463
JAPAN 4,083,941
CHINA* 6,699,187
US – NASDAQ 10,662,317
NYSE (US) 22,464,237Source: World Federation of Exchanges. *Shanghai + Shenzhen SE
Technological innovations, such as electric cars, artificial intelligence and machine learning, have created new industries, many of which are being developed outside Australia.
3.Diversification(andconcentration)As well as being small, the Australian share market is dominated by a small number of large companies. As illustrated in Figure 2, the top 20 companies comprise nearly 55% of the market capitalisation of the S&P/ASX200 index, with many of these companies confined to a small number of sectors, such as financials and resources. Investing globally delivers access to a broader range of sectors and companies, providing diversification benefits to investors’ portfolios.
Why invest beyond Australia’s shores?
HAVE YOU CONSIDERED INVESTING
IN A PART OF EVERYDAY LIFE?
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2. Demographic trendsIn developed markets, the population is ageing, a trend that creates a growing need for aged care facilities, in-home support, pharmaceuticals and wide-ranging medical services. In emerging markets, the rising middle class has a seemingly insatiable appetite for consumer goods, while rapid urbanisation creates demand for materials and energy.
06:30NestléNespresso Consumer Staples - SwitzerlandCommenced a share buyback program on 4 July 2017, which will see Nestlé repurchase up to CHF 20 billion of its shares, due to be completed by end June 2020.
PepsiCo Quaker Oats Consumer Staples - United StatesPepsiCo has paid consecutive quarterly cash dividends since 1965, and 2018 marked the company's 46th consecutive annual dividend increase.
13:00Coca-Cola CompanyPowerade Consumer Staples - United StatesCoca-Cola has paid a quarterly dividend since 1920 and has increased dividends in each of the last 55 years.
Dow DuPontPlastic bottles Materials - United StatesReturned $2.3 billion to shareholders in the fourth quarter of 2018 through dividends (US$0.9 billion) and share repurchases (US$1.4 billion). Since merger close in 2017, Dow DuPont has returned nearly US$10 billion to shareholders.
15:00Iron MountainOffsite storage facilities Real Estate - United StatesAs a REIT the company pays out the majority of cash generation in the form of a dividend.
VodafoneBroadband internet Telecommunication Services - United KingdomVodafone continues to return money to shareholders in the form of a dividend and has committed to growing that dividend as free cash flow grows.
Notsurewhereglobalbrandsfitintoyoureveryday? The following timeline depicts a typical day where you may use or encounter a number of global brands. Some of the multinationals that own those brands may be an unknown name in a portfolio list; dig a little deeper and those names may in fact supply products and services that you use every day.In managing the Funds, Epoch looks for companies that are sustainably growing their free cash flow year on year, and returning that cash to shareholders through consistent and increasing dividends (no cancellations and minimal reductions), share buybacks and/or debt reduction.Investing in such companies enables the Funds to deliver on the objective to provide an above-average level of income to investors.
A ‘day in the life’ of the Epoch Global Equity Shareholder Yield Funds’ portfolio
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PfizerFeldene Gel Health Care - United StatesPfizer returned US$20.2 billion directly to shareholders in 2018 through share repurchases and dividends, and anticipates repurchasing approximately US$9 billion of shares in 2019.
AstraZenecaTurbuhaler asthma medication Health Care - United KingdomIn 2019 the Board reaffirmed its commitment to the company’s progressive dividend policy, intending to maintain or grow the dividend each year.
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National GridElectricity Utilities - United KingdomNational Grid returns cash to its shareholders via an attractive and growing dividend; its policy is to increase the annual dividend at least by the rate of UK Retail Price Index.
SanofiNature’s Own Health Care - France2018 was the 24th consecutive year of dividend growth.
07:30Michelin Group Tyre Manufacturer Consumer discretionary - FranceIn its 2018 results, Michelin announced over €10 billion was returned to shareholders through share buy-backs and dividends.
Royal Dutch ShellPetrol Energy - NetherlandsRoyal Dutch Shell has completed the first and second tranches of its share buyback program, with the intention to buy back at least US$25 billion of its shares by the end of 2020.
20:30SiemensHousehold appliances Industrials - Germany In November 2018, Siemens announced a new share buyback program; with a volume of up to €3 billion, the program is to be executed by 15 November 2021.
Leggett & Platt Engineered components Consumer discretionary - United StatesLeggett & Platt targets a dividend payout ratio of 50- 60% of earnings and expects dividend growth to approximate earnings and free cash flow growth.
07:00UnileverDove Consumer Staples - NetherlandsIn its 2018 results, Unilever announced it would return €10 billion cash to shareholders; €6 billion through a share buyback and €4 billion through dividends.
Kimberly-Clark Corporation Kleenex Consumer Staples - United States2018 marked the 46th consecutive year that Kimberly-Clark has increased its dividend and the 84th straight year it has paid a dividend to shareholders.
18:30McDonald’s CorporationFast food Consumer Discretionary - United StatesIn April 2017, McDonald's announced its intention to return US$22-24 billion to shareholders over the three-year period from 2017-2019.
BAE SystemsCyber security systems Industrials - United KingdomBAE has consistently increased its dividend payments since 1999.
22:30Procter & GambleOral B Consumer Staples - United KingdomRecently announced a 4% increase to its quarterly dividend, making it the 62nd consecutive year in which Procter & Gamble has raised its dividend, and the 128th consecutive year in which it has paid a dividend.
GlaxoSmithKlinePanadol Health Care - United KingdomGSK aims to distribute regular dividend payments that will be determined primarily with reference to the free cash flow generated by the business after funding the investment necessary to support the Group’s future growth.
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Timeline based on companies in the Grant Samuel Epoch Global Equity Shareholder Yield Funds portfolio at 28 February 2019.
11:00BASFMaster Builder Solutions for Australia Materials - GermanyBASF is part of the DivDAX share index, which contains the fifteen companies with the highest dividend yield in the DAX 30. The company aims to increase the dividend per share every year based on a strong free cash flow.
Texas InstrumentsCalculator Information Technology - United StatesIn 2018, Texas Instruments raised its quarterly dividend by 24 percent, marking the 15th consecutive year of dividend increases. Over the last five years, the company has increased the dividend at a compounded annual growth rate of 21 percent.
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AllianzInsurance Financials - GermanyAllianz executed three share buyback programs with a volume of €6 billion in 2017-2018; it has resolved on a new €1.5 billion share buyback program in 2019, to be complete by year end.
08:30Microsoft CorporationWindows software Information Technology - United StatesSince paying its first dividend in 2004, investors in Microsoft have received quarterly dividends that have steadily increased over time.
AXAInsurance & financial services Financials - FranceEffective from financial year 2018, AXA’s new capital management policy sees an increased dividend payout ratio range, from 45% to 55% to 50% to 60%.
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Important InformationGSFM Responsible Entity Services Limited ABN 48 129 256 104 AFSL 321517 (GRES) is the responsible entity of the Epoch Global Equity Shareholder Yield (Hedged) Fund ARSN 130 358 440 and Epoch Global Equity Shareholder Yield (Unhedged) Fund ARSN 130 358 691 (collectively, the Funds) and the issuer of this document.This information has been prepared without taking account of the objectives, financial situation or needs of individuals. Before making an investment decision in relation to a Fund, investors should consider the appropriateness of this information, having regard to their own objectives, financial situation and needs. Prospective investors should read and consider the product disclosure statements for the Funds dated 26 March 2019 and the Additional Information to the Product Disclosure Statement which can be obtained by contacting GSFM on 1300 133 451 or at www.gsfm.com.au.No representation or warranty is made concerning the accuracy of any data included in this document. The information included in this document is provided for informational purposes only and is not indicative of future portfolio characteristics. References to any security do not constitute a recommendation to buy, sell or hold such security. Any security discussed may represent only a small percentage of the strategy’s portfolio holdings, and should not be deemed representative of the entire Fund’s holdings.None of GRES, its related bodies or associates nor any other person guarantees the repayment of capital or the performance of the Funds or any particular returns from the Funds. This document is issued on 22 March 2019. ©2019 GSFM Pty Limited.
For further information about the Epoch Global Equity Shareholder Yield Funds, please contact:
GSFM Pty Limited Level 19, Governor Macquarie Tower 1 Farrer Place, Sydney NSW 2000Phone: (02) 9324 4356 www.gsfm.com.au
Damien McIntyre Chief Executive [email protected]: (03) 9949 8852 Mobile: 0407 266 999
Huw O’Grady Key Account Manager (VIC & WA)[email protected]: (03) 9949 8825 Mobile: 0419 200 052
Zane Leyden Business Development Manager (VIC) [email protected] Phone: (03) 9949 8860 Mobile: 0419 116 626
Steve Taylor State Manager (QLD)[email protected]: (07) 3121 3022 Mobile: 0404 092 635
Stephen Fletcher Head of Retail [email protected] Phone: (03) 9949 8828 Mobile: 0400 559 118
Shaun Thomas Head of Research & Strategic [email protected]: (02) 9324 4355 Mobile: 0450 157 588
Stephen Higgins Key Account Manager (NSW) [email protected] Phone: (02) 9324 4330 Mobile: 0407 094 707
Matthew Ferguson Business Development Manager (NSW)[email protected]: (02) 9324 4342Mobile: 0449 103 640
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