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Swisscanto (LU) Equity Fund Green Invest Emerging Markets:
Benefit from the trend towards sustainable growth
Swisscanto Asset Management Ltd.
Geneva, June 2015
Raphael Lüscher, Senior Portfolio Manager, CFA
Fund focuses on sustainable growth
© Swisscanto Asset Management Ltd.
2
Emerging markets
sustainability fund
Actively managed equity
fund
We invest in competitive companies providing sustainable solutions
in emerging markets.
The focus is on key areas with attractive growth and profitable
potential.
• Fundamental, bottom-up driven
• Long standing expertise in the field of sustainability
• Disciplined investment process and risk management
Swisscanto (LU) Equity Fund Green Invest Emerging Markets
Investor profile
• long-term oriented investors
• exposure to companies benefiting from sustainability related
trends in emerging markets: doing well by doing good
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
50
75
100
125
150
08.2008 08.2009 08.2010 08.2011 08.2012 08.2013 08.2014
Relative monthly return, net (right scale)
Swisscanto (LU) EF Green Invest Emerging Markets B, net
Swisscanto (LU) EF Green Invest Emerging Markets
Sustainable investments in emerging markets offer long-term
return opportunities
© Swisscanto Asset Management Ltd.
3
Net performance since launch in USD, August 2008.
The fund is not managed against MSCI Emerging Markets.
Lipper peer group: Equity Emerging Markets Global
1 year 3 years Since launch
2. quartile 1. quartile 1. quartile
+10.1%
Source: Swisscanto, Lipper as of 30.04.2015
Benefit from the trend towards sustainable growth
Trends and investment risks in emerging markets
Key areas within the transformation process towards sustainable growth
Adding value through strict sustainability analysis and disciplined investment process
4
© Swisscanto Asset Management Ltd.
Relevant trends in emerging markets
© Swisscanto Asset Management Ltd.
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Economic structure
• Growth dynamic
• Competitiveness
• Reforms
Demographics
• Population growth
• Availability of labour
• Consumption behaviour
Natural Resources
• Availability
• Demand & consumption
• Price fluctuations
Climate
• Weather patterns
• Politics and Regulation
• Public interest
• Research
Implications for
society,
environment and
economy
Massive pollution increases and social challenges
are rising
© Swisscanto Asset Management Ltd.
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"Airpocalypse" in Harbin …
Source: AP Photo/Kyodo News, Reuters, ibtimes.
Rising risk of social unrest
China is reconsidering its economic model
© Swisscanto Asset Management Ltd.
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Source: www.economist.com, company
Today 1999 Tomorrow
"China doesn’t need bigger
steel plants. People want
better education, variety in
tourism, high-quality
medical service, better
service for the aged and,
overall, a better life."
Guo Guangchang – Chairman,
Cofounder of Fosun International
Benefit from the trend towards sustainable growth
8
© Swisscanto Asset Management Ltd.
Trends and investment risks in emerging markets
Key areas within the transformation process towards sustainable growth
Adding value through strict sustainability analysis and disciplined investment process
We identify eight key areas acting as catalysts for
more sustainable growth
9
© Swisscanto Asset Management Ltd.
Old economy Sustainable economy
Energy supply
and -efficiency
Sustainable
mobility
Education and
Digital Innovation
Resources and
environmental
services
Water
Financial
inclusion Health
Social
development
The future belongs to
companies, which contribute
• to the decoupling between
economic growth and resource
consumption
• to social peace through the
promotion of equal
opportunities
• Basic education system in Brazil is poor: lack of funding and
quality teaching material, lack of skilled teachers, poor results
• Students from lower income families are disadvantaged in
current school system
• Lack of skilled workers and low productivity in Brazil
Kroton Educacional offers high quality education services and
teaching material at affordable prices
Product analysis reveals high additional benefit
Case study: Equal opportunities through education in Brazil –
Kroton Educacional
Education as enabler – access to better jobs
and higher income opportunities
Sources: Kroton, Hoper, UNESCO, IBGE, Swisscanto, Inrate
© Swisscanto Asset Management AG
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Kroton Educacional provides education
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
China Brazil Chile Mexico USA
Imp
rov
em
en
t fa
cto
r
Income improvement potential for skilled vs. non-skilled
0 20 40 60 80 100
Product analysis
Kroton Educacional SA Sector median Best result
Benefit from the trend towards sustainable growth
11
© Swisscanto Asset Management Ltd.
Trends and investment risks in emerging markets
Key areas within the transformation process towards sustainable growth
Adding value through strict sustainability analysis and disciplined investment process
discipline
Invest-ment focus
avoid
monitor
Our philosophy – simultaneous consideration of sustainability
and fundamentals
12
© Swisscanto Asset Management Ltd.
High sustainability
impact
Unattractive fundamentals
Low sustainability impact
Attractive fundamentals
20.5
12.2
12.1
7.8 7.7
7.8
6.5 6.2
19.2
ChinaKorea, Republic ofHong KongBrazil
© Swisscanto Asset Management Ltd.
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Allocation by countries (fund, %)
Source: Swisscanto, as of 30.04.2015
Swisscanto (LU) EF Green Invest Emerging
Markets: Current portfolio structure
Allocation key areas (fund, %)
28.7
20.4 18.2
10.1
7.7
6.5 6.1
Financial inclusionEducation & digital innovationEnergy supply & efficiencySustainable mobilityHealth
Swisscanto (LU) EF Green Invest Emerging Markets: Our top
convictions
© Swisscanto Asset Management Ltd.
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Company Country % Sector Key theme
MTN GROUP South Africa 2.23 Telecommunication Services Education & digital innovation
ZHUZHOU CSR TIMES ELECTRIC China 2.20 Industrials Sustainable mobility
VALID SOLUCOES Brazil 2.17 Industrials Education & digital innovation
AGRICULTURAL BANK OF CHINA China 2.15 Financials Financial inclusion
HUANENG RENEWABLES China 2.14 Utilities Energy supply & efficiency
BEIJING ENTERPRISES WATER Hong Kong 2.12 Utilities Water
NEW ORIENTAL EDUCATION United States 2.11 Consumer Discretionary Education & digital innovation
CHINA MOBILE China 2.09 Telecommunication Services Education & digital innovation
ICICI BANK LTD-SPON India 2.08 Financials Financial inclusion
SK TELECOM Korea, Republic Of 2.07 Telecommunication Services Education & digital innovation
Source: Swisscanto, as of 30.04.2015
One of our best ideas in financial inclusion
© Swisscanto Asset Management AG
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Description
Banco Compartamos (Gentera) is the leading micro
finance services provider in Mexico and across Latin
America
Key financial metrics:
• ROE (2014): 30.3%
• ROA (2014): 11.2%
• More than 2m active customers
• Market Cap: USD ~2.8bn
Core elements of investment thesis:
• High structural growth in Mexico driven by
underdeveloped banking system and low credit
penetration
• Solid business model with high barriers to entry
• Continuous high return on equity with low levels of non-
performing loans
• Strong management team with solid track record
Core elements of sustainability thesis :
• Gentera provides access to micro loans and working
capital loans for low income population (average loan of
400 USD)
• Company generates social, economic and human value
through financial inclusion, innovation and education
• 70% of population in Mexico does not have access to
traditional banking products and services
• 98% of customers are women
Sources: Swisscanto, Inrate, Bloomberg, company
One of our best ideas in health care
© Swisscanto Asset Management AG
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Description
Aspen Pharmacare is a South African-based supplier of branded and generic pharmaceuticals in more than 150
countries across the world and of consumer and nutritional
products in selected territories.
Key financial metrics:
• EBIT margin (2015e): 24.4%
• ROE (2014): 19.4%
• Operating Cash Flow (2014) : USD 493m
• Market Cap: USD ~14.2bn
Core elements of investment thesis:
• Strong market position and broad diversification across emerging markets
• Stable management team with a strong track record
• Economies of scale in production of pharmaceuticals (cost efficiencies)
• Strong sales and earnings growth
• Above-average profitability and return on invested capital
Core elements of sustainability thesis:
• Aspen sells high quality, effective and affordable pharmaceuticals across emerging markets
• Expansion of product offering (healthy food, infant formula,
etc.)
• 6% of sales reinvested in research and development
• Above-average sustainability profile within health care peer group
Sources: Swisscanto, Inrate, Bloomberg, company
One of our best ideas in energy efficiency
© Swisscanto Asset Management AG
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Description
Delta Electronics is a Taiwanese IT company. The company sells switching power supplies and other electronic components
for various applications and industries.
Key financial metrics:
• EBIT margin (2015e): 11.7%
• ROE (2014e): 21.1%
• Operating Cash Flow (2014): USD 918.3m
• Market Cap: USD ~13.8bn
Core elements of investment thesis:
• Strong market position and credible management
• Proactive investments into new growth trends (e.g.
automation)
• Margin improvement expected to drive earnings growth
• Maintaining of strong level of profitability (ROE, ROIC) and
solid balance sheet
• Attractive valuation
Core elements of sustainability thesis:
• Global leader in power management and thermal solutions for IT sector
• Products improve energy efficiency and lead to lower costs
across several industries
• Innovation leader with 6% of sales being reinvested in R&D
Sources: Swisscanto, Inrate, Bloomberg, company
Swisscanto (LU) EF Green Invest Emerging Markets:
Comparable risk to MSCI Emerging Markets
© Swisscanto Asset Management Ltd.
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Characteristics
Swisscanto (LU) EF
Green Invest Emerging
Markets
MSCI
Emerging Markets
Total Risk (ex ante) 15.9% 16.8%
Tracking Error (ex ante) 4.3%
Beta (ex ante) 0.92
Price to Earnings (P/E 2015e) 18.4 17.0
Price to Book (P/B 2015e) 2.7 1.9
Dividend Yield 1.8 2.2
Number of stocks 64 832
- Active share* 85.7%
Market capitalisation (in USD)
> 10 bn (Large Caps) 52% 70%
3-10 bn (Mid Caps) 29% 25%
< 3 bn (Small Caps) 19% 5%
Sources: Barra, Bloomberg, MSCI, as of 30.04.2015
Comparable level of risk
Active, sustainable and
concentrated portfolio
All Caps
(current bias towards
Small & Mid Caps)
* % of portfolio that differs from the benchmark
Benefit from the trend towards sustainable growth
Appendix
© Swisscanto Asset Management Ltd.
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Follow us
© Swisscanto Asset Management Ltd.
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Funds in focus: http://www.swisscanto.ch/greenemma
Key data
© Swisscanto Asset Management Ltd.
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Swisscanto (LU) Equity Fund Green Invest Emerging Markets
Benchmark MSCI Emerging Markets Net Return
Share classes B: Retail (capitalisation) R: Retail (with agreement) J: Institutional
(capitalisation)
P: institutional (with
agreement)
Currency USD USD USD USD
Flat rate management
fee 2.00% 1.00% 1.53% 1.13%
Total Expense Ratio 2.26% 1.13% 1.72% 1.33%
Security number 3650277 23115375 3650280 20252840
ISIN LU0338548034 LU0999461055 LU0338548117 LU0866273294
Date of launch 25.09.2008 ongoing 25.08.2008 07.05.2013
Admitted for trading CH, AT, DE, LI, LU CH, AT, DE, LI, LU CH, AT, DE, LI, LU CH, AT, DE, LI, LU
Swisscanto sustainable investments above CHF 2 bn AuM
© Swisscanto Asset Management Ltd.
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Swisscanto EF Green Invest CHF Swisscanto PF Green Invest Equity EUR Swisscanto EF Green Invest Emerging Markets USD
Yield
Risk
Swisscanto PF Green Invest Income CHF/EUR
Swisscanto PF Green Invest Yield CHF/EUR
Swisscanto PF Green Invest Balanced CHF/EUR
Stocks Bonds or/and cash Theme funds
Swisscanto EF Climate Invest EUR Swisscanto EF Water Invest EUR
PF = Portfolio Fund EF = Equity Fund
Swisscanto (LU) Equity Fund Green Inv. Emerging Markets B
Performance (gross) in USD as per 30.04.2015
24
© Swisscanto Asset Management Ltd.
Source: Lipper
Indexed Performance over 5 years (gross of Fees)
Performance (gross of Fees)
Yearly Performance (gross of Fees, in %)
Past performance is no indication of future performance and does not guarantee success in the future.
60
80
100
120
140
04.2010 04.2011 04.2012 04.2013 04.2014 04.2015
Swisscanto (LU) Equity Fund Green Invest Emerging…
8.6
-25.6
20.5
11.0
3.7 6.0
19.2
-18.4
18.2
-2.6 -2.2
10.1
-10.6 -7.2
2.3
13.6
5.9
-4.1
-30
-20
-10
0
10
20
30
2010 2011 2012 2013 2014 2015 YTDSwisscanto (LU) Equity Fund Green Invest EmergingMarkets B
Portfolio Benchmark ∆
1 year annualised 9.23 7.80 1.43
3 years annualised 9.56 3.24 6.33
5 years annualised 3.75 3.06 0.69
Since inception annualised 7.38 3.90 3.48
3 years 31.52 10.02 21.49
5 years 20.23 16.28 3.95
Since inception 60.73 29.05 31.68
Information Ratio Tracking Error Information Ratio
(3 years) (3 years)
2015 YTD 6.73 0.88
2014 6.53 1.07
2013 5.79 0.34
2012 5.49 -1.01
2011 6.59 -0.71
2010 0.00 0.00
3 years annualised 6.73 0.88
5 years annualised 6.30 0.11
Since inception annualised 7.83 0.42
Inception 25.08.2008
Swinging Single Pricing Yes
Swisscanto (LU) Equity Fund Green Inv. Emerging Markets B
Performance (net) in USD as per 30.04.2015
25
© Swisscanto Asset Management Ltd.
Source: Lipper Past performance is no indication of future performance and does not guarantee success in the future. The performance data do not take account of commission and
costs charged for the issuing and redemption of units.
Indexed Performance over 5 years (net of Fees)
Performance (net of Fees)
Yearly Performance (net of Fees, in %)
60
80
100
120
140
04.2010 04.2011 04.2012 04.2013 04.2014 04.2015Swisscanto (LU) Equity Fund Green Invest Emerging…
6.1
-27.2
17.8
8.5
1.4 5.2
19.2
-18.4
18.2
-2.6 -2.2
10.1
-13.1 -8.8
-0.4
11.1
3.6
-4.9
-30
-20
-10
0
10
20
30
2010 2011 2012 2013 2014 2015 YTDSwisscanto (LU) Equity Fund Green Invest EmergingMarkets B
Portfolio Benchmark ∆
1 year annualised 6.81 7.80 -0.99
3 years annualised 7.12 3.24 3.89
5 years annualised 1.45 3.06 -1.62
Since inception annualised 4.98 3.90 1.08
3 years 22.93 10.02 12.91
5 years 7.44 16.28 -8.84
Since inception 38.30 29.05 9.25
Information Ratio Tracking Error Information Ratio
(3 years) (3 years)
2015 YTD 6.73 0.55
2014 6.53 0.72
2013 5.79 -0.05
2012 5.49 -1.42
2011 6.59 -1.05
2010 0.00 0.00
3 years annualised 6.73 0.55
5 years annualised 6.30 -0.25
Since inception annualised 7.83 0.13
Inception 25.08.2008
Swinging Single Pricing Yes
Total Expense Ratio 2.25%
Our sustainability approach is based on long-standing
expertise
© Swisscanto Asset Management Ltd.
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Sustainable investment universe emerging markets
Total investment universe emerging markets
Swisscanto -
Sustainability approach
Analysis of impact Risk reduction Strict implementation:
Selection of companies with a
positive impact on the environment, society and with a strong corporate governance
Avoid sectors/activities that
contradict sustainable development
1. Sustainability data from Inrate
2. Selection by our internal
sustainability research
3. Swisscanto Sustainability
Advisory Committee (external
experts)
4. Universe binding for PMs
Our investment process is transparent and disciplined
© Swisscanto Asset Management Ltd.
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Portfolio construction and
risk management Research Idea generation
• Identification of trends
and themes
• Identification of
companies exposed to
key areas
• Quantitative and
qualitative screening
• Internal equity platform
• Internal economists
• Conferences, site visits
and 1-to-1
• Independent investment
thesis
• Focus on barriers to
entry and 'economic
moat'
• Fundamental
analysis and valuation
• Attractiveness score
(internal database)
Sustainable investment universe EM (400-500 stocks¹)
• Co-management
• Implementation of "best ideas"
from research
• Performance reviews
• Structure of portfolio
• Sell discipline and Timing
• Diversification
(countries and sectors)
• Contribution to risk
• Liquidity analysis
1) As of November 2014
Portfolio
(50-70
holdings)
Focus on profitable, competitive and sustainable companies
Raphael Lüscher, CFA
© Swisscanto Asset Management Ltd.
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Senior Portfolio Manager
Raphael Lüscher (1976) is a Director, Senior Portfolio Manager and as a co-manager
responsible for the Swisscanto (LU) Equity Fund Green Invest Emerging Markets,
Swisscanto (CH) Equity Fund Tiger and Swisscanto (CH) Equity Fund Emerging
Markets.
Before joining Swisscanto, Raphael worked eleven years at UBS Global Asset
Management, most recently as a senior portfolio manager for sustainable equity funds,
sector funds and institutional mandates on locations in Zurich and Singapore. Prior to
that, he was as a portfolio manager and analyst for European equity funds. He began his
professional career at UBS as well, where he completed a talent programme in the
Global Asset Management.
Raphael Lüscher received a master's degree in Economics from the University of St.
Gallen (lic.oec.HSG). In 2009, he obtained his diploma as a Chartered Financial Analyst
(CFA).
Joined Swisscanto: 2014
Professional experience: 13 years
Dr. Gerhard Wagner, CFA
© Swisscanto Asset Management Ltd.
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Head of Sustainable Investments
Gerhard Wagner (1968) is a Director, Senior Portfolio Manager and as a co-manager
responsible for sustainable Swisscanto collective investments (investment funds,
investment groups) and institutional mandates, which are managed according to the
Green Invest- and Responsible Invest approach. Summarized these are the Equity
Green Invest, -Water Invest, -Climate Invest, Green Invest Emerging Markets and
Responsible Invest strategies.
Gerhard is an acknowledged expert in the management of sustainable investments and
was last in charge of the SRI team at UBS. From 1994 to 2001, he worked as a scientist
at the ETH/EAWAG in the field of climate physics.
Gerhard Wagner holds a master's degree in Physics from the University of Konstanz.
Afterwards, he earned a doctorate in Natural Sciences (Dr. rer. nat.) at the ETH Zurich.
In 2006, he obtained his diploma as a Chartered Financial Analyst (CFA).
Joined Swisscanto: 2008
Professional experience: 20 years
Roman Boner, CFA
© Swisscanto Asset Management Ltd.
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Portfolio Manager
Roman Boner (1980) is a Manager, Portfolio Manager and as a co-manager responsible
for sustainable Swisscanto collective investments (investment funds, investment groups)
and institutional mandates, which are managed according to the Green Invest- and
Responsible Invest approach. Summarized these are the Equity Green Invest, -Water
Invest, -Climate Invest, BVG 3 Oeko and Responsible Invest strategies.
Before joining Swisscanto, Roman worked ten years at UBS Global Asset Management,
the last five years as a portfolio manager and an analyst for sustainable equity funds and
institutional mandates. Prior to that, he led the Investment Service Global & US Equities
team and was a portfolio manager for global equity funds. He began his professional
career at UBS as well, where he completed two talent programmes in the Private &
Corporate Clients division.
Roman Boner received a Bachelor in Business Administration from the University of
Applied Sciences in Zurich (HWZ). In 2013, he obtained his diploma as a Chartered
Financial Analyst (CFA).
Joined Swisscanto: 2013
Professional experience: 15 years
Marion Swoboda
© Swisscanto Asset Management Ltd.
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Head of Sustainability Research
Marion Swoboda (1965) is a Director and as a Head of Sustainability Research
responsible for the sustainability approach and its implementation.
Before joining Swisscanto, Marion worked for ten years at SAM Sustainable Asset
Management as a senior sustainability/equity analyst mainly focused on the financial
sector. Previously, she worked seven years as a senior economist and as senior fund
analyst at Credit Suisse Group.
Marion Swoboda has gained extensive knowledge in a broad range of sustainability and
together with the ETH Institute for Sustainability and Technology she published the study
"Climate Change and Banks: Opportunities and Risks".
Marion Swoboda graduated in Macroeconomics (lic. oec. publ.) at the University of
Zurich.
Joined Swisscanto: 2011
Professional experience: 21 years
Disclaimer
© Swisscanto Asset Management Ltd.
32
These documents are intended for the exclusive use of supervised financial intermediaries of Swisscanto. It is prohibited to copy
these documents or to use them for any other purpose. Under no circumstances may these documents be used as promotional
materials for sale or made available either directly or indirectly to a third party without the written permission of Swisscanto Funds
Management Ltd. An intermediary is solely responsible, in particular to the investor and to Swisscanto, for the use of information
contained in these documents. Past performance is no indication of future performance and does not guarantee success in the
future. The performance data do not take account of commission and costs charged for the issuing and redemption of units.
Mentioning particular securities does not constitute any recommendation to buy or sell them. The information contained in this
document has been compiled with the greatest care by Swisscanto. This information and opinions expressed here have been
obtained from reliable sources. Despite taking professional care, Swisscanto cannot guarantee the correctness, completeness or
topicality of the information. Swisscanto does not accept any liability for investments made on the basis of the information
contained in this document. The information contained in the document does not constitute an offer unless this is explicitly
indicated. The documents published (fund contract, contractual conditions, prospectuses and/or key investor informations, and
reports) can be obtained free of charge at www.swisscanto.com. The sources for obtaining the documents published in paper
form, at least in German and free of charge, according to the country are: Switzerland: Representative Swisscanto Asset
Management Ltd, Nordring 4, P.O. Box 730, 3000 Berne 25, all branches of Cantonal Banks in Switzerland and the Bank Coop
AG. Paying Agent in Switzerland: Basler Kantonalbank, Spiegelgasse 2, 4002 Basel. Germany: Paying and information agency
DekaBank, Mainzer Landstrasse 16, 60235 Frankfurt a.M. Austria: Vorarlberger Landes- und Hypothekenbank Aktiengesellschaft,
Hypo-Passage 1, 6900 Bregenz. Liechtenstein: Valartis Bank (Liechtenstein) AG, Schaaner Str. 27, 9487 Gamprin-Bendern.
Luxembourg: RBC Dexis Investor Services Bank S.A., 14, Porte de France, 4360 Esch-sur-Alzette.