Cavendish

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EXPERTISE BUILT IN INSIGHTINTELLIGENTINVESTINGFOCUSEDONPE NCELONGTERMGROWTHEQUITYSPECIALISTSAC DMANAGEMENTUNIQUEINSIGHTINTELLIGENTINV CUSEDFINDINGIVALUELONGTERMGROWTHEIQU BALIPERSPECTIVEIVEFUNDMANAAGEMJULIANIL NTUNIQUEINSIGHTINTELLIGENTINVESTINGFOCU RFORMANCELONGTERMGROWTHEQUITYSPECI TIVEFUNDMANAGEMENTUNIQUEINSIGHTINTELL ESTINGFOCUSEDONPERFORMANCELONGERMGR UITYSPECIALISTSACTIVEFUNDMANAGEMENTUN IGHTINTELLIGENT 2 NOVEMBER 2011 This presentation is for investment professionals only and is not intended for retail clients EXPERTISE BUILT IN 1

Transcript of Cavendish

Page 1: Cavendish

EXPERTISE BUILT IN

West World, West Gate, London W5 1DT

Tel 0800 028 66 59

WWW.CAVENDISHAM.CO.UK

UNIQUEINSIGHTINTELLIGENTINVESTINGFOCUSEDONPERFORMANCELONGTERMGROWTHEQUITYSPECIALISTSACTIVEFUNDMANAGEMENTUNIQUEINSIGHTINTELLIGENTINVESTINGFOCUSEDFINDINGIVALUELONGTERMGROWTHEIQUIT

GLOBALIPERSPECTIVEIVEFUNDMANAAGEMJULIANILEMENTUNIQUEINSIGHTINTELLIGENTINVESTINGFOCUSE

DONPERFORMANCELONGTERMGROWTHEQUITYSPECIALISTSACTIVEFUNDMANAGEMENTUNIQUEINSIGHTINTELLIGENTINVESTINGFOCUSEDONPERFORMANCELONGERMGROWTHEQUITYSPECIALISTSACTIVEFUNDMANAGEMENTUNIQUEINSIGHTINTELLIGENT

2 NOVEMBER 2011

This presentation is for investment professionals only and is not intended for

retail clients

EXPERTISEBUILT IN

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OVERVIEW

The Cavendish Worldwide Fund

• Focused on a long-term growth-oriented perspective.

• As a result, tends to have a heavy concentration in emerging

markets or stocks exposed to emerging economies.

• Near-term risk/reward profile means that the fund has an unusually

high cash weighting.

• We are looking for opportunities to reduce cash (non-equity)

holdings as equities tend to lead economic recovery.

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Cavendish Asset Management

Long-only equity specialists

Stockpickers

Range of 10 OEIC funds

Experienced fund managers working collegiately

All funds have same manager since launch

Privately owned by large multi-national parent

company

Manage £648m

Source: Cavendish/Northern Trust. Figures as at 30/09/11

A BRIEF INTRODUCTION

Julian Lewis CIO and Fund

Manager

Cavendish Worldwide Fund

Manager since launch 06/07/1994

Fund Size £61.2m

IMA Sector Active Managed

Also manager of

Cavendish UK Balanced Income Fund

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FINDING VALUE

For the Worldwide Fund, it is a bottom

up focus but following some top down

themes.

Not led by sector allocation, led by the

themes

Shared Insight from 6 fund managers

who regularly visit their markets

Supported by 4 analysts with a global

focus

STRONGMARKETPOSITION

ATTRACTIVE STRATEGY

GOOD MANAGEMENT

MACRO TRENDS

ECONOMIC GROWTH

FLOW OF FUNDS

BENCHMARK WEIGHTINGS

We take account of:

And use these factors to find, identify

and validate good businesses.

Stock Pickers

We look for companies with:

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CAVENDISH WORLDWIDE FUND

10 year Fund Performance

Cavendish Worldwide Retail FTSE World TR GBP IMA Active Managed

Source: Lipper. % growth, total return, GBP, single price, UK net income reinvested with no initial charges. Past performance is no guarantee of future returns. Figures as at

30/09/11

-40

0

40

80

120

160

28/ 09/ 2001 28/ 09/ 2003 28/ 09/ 2005 28/ 09/ 2007 28/ 09/ 2009 28/ 09/ 2011

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PORTFOLIO CONSTRUCTION

Diversification across

markets

Small Bets

111 Holdings

None larger than 1.5%

Invested across 26

geographic locations

Source: Cavendish/Northern Trust. Figures as at 30/09/11

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Source: Cavendish, Northern Trust.

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ASSET ALLOCATION - NON EQUITIES

0%

5%

10%

15%

20%

25%

30%

Worldwide Fund – Non-equity position to 21st October 2011

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EQUITIES TODAY

• Shorter term uncertainty, positive long term outlook

• Equities cheap on a long term view

• Dividends/yields trending upwards

10 years Dividend MSCI World Index 10 years Price to Book MSCI World Index

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Equity Dividend Yield

0

1

2

3

4

5

6

0

0.5

1

1.5

2

2.5

3

Source: Cavendish, Bloomberg 21/10/11

Price to Book Ratio

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CURRENT FAVOURED THEMES

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Emerging Markets

Developed Economies

-prefer US to Europe (ex UK)

Consumer Markets

Manufacturing

Technology

Dividend Growth

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CASE STUDIES

Detail provided on the following

Youngone - Korea

Trakya Cam – Turkey

Tractor Supply company - USA

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KOREA – STOCK PICKS

YOUNGONE

A leading Korean manufacturer and exporter of sportswear

and backpacks. Clients include North Face, Polo Ralph

Lauren, Nike, Timberland.

Benefits from new order momentum and de-stocking by

American and European buyers.

Low cost base, 65% of production situated in Bangladesh

Bangladesh import tax benefit to Western buyers.

Internal and regional demand strong.

Current 11x P/E has increased from last year’s 8x but still

looks good value.

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Source: Cavendish, Bloomberg 21/10/11

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TURKEY – STOCK PICKS

TRAKYA CAM

Manufacturer of basic glass, automotive glass and glass for

other vehicles, energy glass, glass for home appliances.

Biggest glass manufacturer in Turkey with strong demand

and leading market position.

Products used in construction and automotive sectors, which

are highly correlated with economic growth.

Good growth story in emerging markets.

Valuation of 8x P/E but downside risks in short-term.

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Source: Cavendish, Bloomberg 21/10/11

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USA – STOCK PICKS

TRACTOR SUPPLY CO

The leading operator of farm and ranch stores in the United

States. Gaining market share in a fragmented industry.

Focused on lifestyle needs of recreational

farmers, ranchers, and small businesses (smallholdings).

Plans to grow its1000 shops to 1800 over the longer term.

Outstanding track record – 23% net income CAGR

(Compound Annual Growth Rate) since 1992, with sales

growing every single year.

Excellent Q3 results, Forward P/E 25x.

Consensus estimates of nearly 20% annual EPS growth

over next 3-5 years.

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Source: Cavendish, Bloomberg 21/10/11

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CONCLUSION – CAVENDISH WORLDWIDE FUND

Geographic Allocation of Equity Holdings

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Latin America (6.69%)

Asia Pacific (25.42%)

Europe (ex UK) (14.27%)

Japan (5.71%)

North America (19.65%)

UK (21.71%)

Other (6.56%)

Overweight

Emerging Markets

Looking For…

Growing Consumer Markets

Attractive Valuations

Source: Cavendish, Northern Trust 28/10/2011

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IMPORTANT INFORMATION

This presentation is for investment professionals only, it is

and is not intended for retail clients and may not be

distributed to third parties.

Cavendish Asset Management Limited has issued and approved

this presentation. It is authorised and regulated in the United

Kingdom by the Financial Services Authority under

registration number 116252.

This presentation should not be regarded as giving you or

your clients investment or tax advice about our products.

You can obtain copies of Cavendish Investments Funds’

Prospectus and Simplified Prospectus, both these documents

are in English and are available from the literature page of

our website www.cavendisham.co.uk.

The presentation does not form the basis of, nor should it be

relied upon in connection with, any subsequent contract or

agreement. It does not constitute and may not be used for the

purpose of an offer or invitation to subscribe to, or

otherwise acquire shares in any of the products mentioned.

Past performance is not a guide to future returns. The value

of the shares in the funds and the income from them, if

any, may fall as well as rise. Investing in the funds involves

risks, including those arising from stock and bond

markets, currency exchange rate and interest rate volatility.

Investors should always obtain professional advice before

investing in our funds.

Cavendish Asset Management Limited is registered in England

no. 735076 at Chelsea House, West Gate, London W5 1DR.

2011/046

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