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Transcript of Alliance trust investments
Alliance Trust North American Equity Fund
Matthew Strachan Head of North American Equities
Justin Atkinson, CFA Investment Manager
Tom Pearson Director, Head of UK Retail Sales
For investment professionals only
2
Investment Themes
Energy
Independence
Industrial
Renaissance
3 screens
and the cloud Canada
• Technological Innovation
• Huge activity
• Cheaper Energy
• Overseas potential
• Solid manufacturing base
• Infrastructural demand
• Growing competitiveness
• Repatriation
• Technological evolution
• Social Networks
• World leaders
• Future growth
• Sensible
• Reliable
• Dynamic
• Open for business
3
Energy independence?
4
What has happened to oil production?
US crude oil production (barrels per day ‘000)
Source: US Dept of Energy
5
National Oilwell Varco
6
Union Pacific Railroad
7
North American Process
7
Fishing in a big pool
8
Stock Selection
9
Source: Financial Express
As at 28.09.2012
Top 10 holdings vs benchmark
Alliance Trust North American Equity Fund
0
1
2
3
4
5
6
7
Bank of
Nova Scotia
Philip
Morris
Ross Stores New York
Community
Bancorp
Yamana
Gold
InterOil PfizerLions
Gate
American
Tower
Apple
MSCI North America Index Total Return (£)
Weightings (%)
10
Benchmark top 10 constituents vs Fund
Source: Financial Express
As at 28.09.2012
0
1
2
3
4
5
6
7
Johnson &
Johnson
Procter &
Gamble
GoogleAT&T MicrosoftInternational
Business
Machines
ChevronGeneral
Electric
Exxon
Mobil
Apple
Weightings (%)
Alliance Trust North American Equity Fund MSCI North America Index Total Return (£)
11
Strong and consistent investment performance
Performance (%) to 28 September 2012
YTD 12months 2 Years 3 Years
North American Equity Fund* 11.99 23.95 10.63 11.08
Sector Average 8.58 19.12 9.88 9.74
Benchmark** 11.37 24.35 12.31 12.54
Peer Group Ranking 12/107 13/103 47/100 33/93
Quartile 1 1 2 2
Source: Financial Express
* After annual asset management fee of 1.2% and any applicable performance fee
** FTSE All-Cap North America £ until 31st December 2011 and MSCI North America £ thereafter
Past performance is not a guide to future performance. Income can fall as well as rise as a result of market and currency fluctuations and you
clients may get back less than they invested. Capital growth may be constrained or eroded with annual charges and any performance fee
chargeable being deducted from capital.
12
Importance of managing volatility
Source: Financial Express
Alliance Trust North American Equity Portfolio Risk Return Profile
13
Stock selection, carefully blended
28th September 2012
Source: MSCI BARRA, Factset, Alliance Trust
14
Building performance from a solid foundation
Cumulative from April 2009 to September 2012
15
Outlook
• Fiscal Cliff
• Debt Ceiling
• US drought
• Re-shoring of manufacturing
• Wireless data growth
• Canada and Mexico >30% of exports
• US housing
Concerns Opportunities
16
Important Information
• This presentation is intended for investment professionals only. It must not be distributed to, or relied upon by, retail investors.
• Past performance is not a guide to future performance. The value of investments and the income from them may go down as well as up and is
not guaranteed. You may not get back the amount invested.
• Some of the funds have underlying holdings which are denominated in currencies other than Sterling and therefore may be affected by
movements in exchange rates. Consequently, the value of these investments may rise or fall in line with exchange rates.
• Where a fund invests in a concentrated number of securities, there is an increased risk of volatility which may result in frequent rises and falls
in the fund’s share price.
• Investments in emerging markets may involve a higher element of risk due to less well regulated markets and political and economic
instability.
• Where a fund invests in derivatives, this may lead to greater volatility in the price of a fund as the value of these instruments can fluctuate
significantly.
• Where annual management charges or performance fees are taken from capital, this may have the effect of constraining capital growth and
may lead to capital erosion. Investors may be subject to tax on distributions.
• Whilst care has been taken in compiling the content of this presentation, no representation or warranty, express or implied, is made by Alliance
Trust Investments as to its accuracy or completeness. Some slides may been compiled from external sources. Whilst these sources are
believed to be reliable, the information has not been independently verified and therefore no representation is made as to its accuracy or
completeness.
• Nothing said or covered by this presentation should be construed as being an invitation or inducement to engage in investment activity. No
advice is given by Alliance Trust Investments.
• Alliance Trust Investments is the trading name of Alliance Trust Asset Management Limited, which is registered in Scotland (no. 330862) with
its registered office at 8 West Marketgait, Dundee and is authorised and regulated by the Financial Services Authority reference number
479764 (www.fsa.gov.uk).
Alliance Trust Investments
8 West Marketgait, Dundee DD1 1QN
T 01382 321000
www.alliancetrustinvestments.com
17
North American Equity Team
• Experienced
• Focused
• Disciplined
Internationally experienced team
Position Sector Coverage
Company
Experience
Industry
Experience
Matt Strachan
Head of North
American Equities Resources, Healthcare and Industrials 26 26
Tim Gibbens,
AIMR Investment Manager Financials, Consumer Staples & Disc. 18 18
Justin Atkinson,
CFA Investment Manager Technology, Telecoms and Utilities 2 10
18
North American Portfolio
Fundamental, focussed and different.
Holdings 30 - 45
Investment horizon 2 – 5 Years
Outperformance target Benchmark + 2-4%
Tracking error 4 – 8%
Turnover 25 – 35%
Benchmark MSCI North America
Max Overweight/Underweight +/- 5%
Concentration Top 10 stocks, 40 – 50%
19
Top 20 stocks
Stock Weight (%) Stock Weight (%)
1. Apple 5.91 11. Visa 3.18
2. American Tower 5.14 12. Clean Harbors 3.16
3. Lions Gate Entertainment 5.02 13. Microsoft Corp 2.82
4. Pfizer 4.94 14. Enterprise Product Partners 2.80
5. InterOil 4.71 15. Caterpillar Inc 2.72
6. Yamana Gold 3.95 16. Express Scripts Holding Co 2.68
7. New York Community Bancorp 3.64 17. Suncor Energy 2.64
8. Ross Stores 3.55 18. DaVita Inc. 2.38
9. Philip Morris International 3.41 19. Plum Creek Timber Co 2.18
10. Bank of Nova Scotia 3.34 20. Apache 2.14
As at 28.09.2012
20
Alliance Trust North American Equity Portfolio
Performance vs IMA North America Sector
Calendar Rolling
% 2005 2006 2007 2008 2009 2010 2011 2012 2 Years 3 Years 4 Years 5 Years
North American Equity
Portfolio* 17.85 -0.59 11.85 -6.81 21.73 12.69 -2.1 10.53 20.5 54.42 41.99 42.47
Sector Average 18.69 -1.02 4.78 -18.36 18.98 17.4 -1.55 4.24 20.81 49.97 32.38 16.56
Peer Group Ranking 36/59 34/63 12/68 2/73 30/82 78/90 53/95 4/106 31/98 38/93 17/83 2/72
Quartile Ranking 3 3 1 1 2 4 3 1 2 2 1 1
Source: Financial Express, total return, bid to bid to 30.06.2012
* The simulated figures above are based on the performance of the proprietary North American assets of Alliance Trust PLC with the estimated Total Expense Ratio (TER) of
1.48% of the Alliance Trust North American Equity Fund deducted. The estimated TER is based on the information used for the Alliance Trust North American Equity Fund, an
open-ended sub-fund of Alliance Trust Investment Funds ICVC.
5 Years to 30.06.2012 North American
Equity Portfolio
Relative to Benchmark (p.a.)** 3.9%
Tracking Error 5.61%
Information Ratio 0.70
2011 Turnover 25%
Source: Alliance Trust PLC total return to 30.06.2012. These performance figures relate to the proprietary
North American assets of Alliance Trust PLC.
** Benchmark was FTSE North America Large Cap(£) until 31 July 2005, FTSE North America All-Cap (£)
to 31 December 2011 and MSCI North America(£) thereafter.
Past performance is not a guide to future
performance. The value of investments and
the income from them may go down as well
as up and is not guaranteed and you clients
may get back less than they invested.