Omam
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Transcript of Omam
200 years of economic history and how I ruined the world
Stewart Cowley, Head of Fixed Income
Can hold currencies
outside the fund base or not
Wide duration range –
both positive and negative
Can hold up to 50% in corporate bonds
or not2
3
200 years of health and wealth
1960
1918
75
40$400 $40,000
Health
WealthSource: UN
4
1960 1965 1972 1977 1987 2011
5
Global reserves$10 trillion East Asia
and Pacific$5.5trillion
Japan$1trillion
Middle East$1trillion
US$0.5trillion
Source: IMF
6
Global imbalances
Source: Bloomberg
5,000
3,000
1,000
-3,000
-5,000
-7,000
-9,000
-1,000
Developing national reserves
US Treasury borrowing
7
200 years of health and wealth
Source: UN
40
75
Health
Wealth$400 $40,000
8
200 years of health and wealth
Source: UN
40
75
Health
Wealth$400 $40,000
9
1960Global Over-Eaters Index Daily Calories/2,245
Source: UN
1.0
0.9
1.3
0.9
0.7
1.1
1.4
1.1
1.7
1.2
1.3
1.4
2008
10
Calorie-in-take and Income
Source: UN
11
The carbon blipReserves
Time
Knownreserves
12
Cars sold in China and US each yearMillions
Source: Bloomberg
2005 2007 2009
20
15
10
5
US
China
13 Old Mutual Asset Managers (UK)
Internet usage over last 20 years
Source: UN
68%
8%
75%
24%
14
Annual Australian coal exports to China
20,000
40,000
60,000
80,000
Millions tonnes
Source: Bloomberg
2000 2002 2004 2006 2008 2010
15 Old Mutual Asset Managers (UK)
Alternative energy usage over last 50 years
Source: UN
39%
4%
1%
6%
0%
ME 0%
43%
18%
11%
15%
3%
ME 1%
16 Old Mutual Asset Managers (UK)
Gold
1oz 15
Source: UN
17 Old Mutual Asset Managers (UK)
Gold and oil
If you think oil is going to $150 then….
Gold will be 15 x 150 = $2,250
140
US$/barrel
1959 1969 1979 1989 1999 2009
100
60
20
Source: Datastream
18 Old Mutual Asset Managers (UK)
Strategic conclusions
19 Old Mutual Asset Managers (UK)
The global trend towards health and wealth is having profound effects
Embrace deficit reducers
Avoid deficit creators
Embrace commodity currencies –inflation is coming
Embrace companies at “pinch points” in the supply chain
20 Old Mutual Asset Managers (UK)
Portfolio conclusions
Buy Australian Dollar, Canadian
dollar, South African Rand.Avoid the US
dollar
Avoid government
bonds – create a negative duration
Buy companies with low gearing and unique
product placements21
22 Old Mutual Asset Managers (UK)
Duration
Preparing for yields to rise….
Total duration -3.4
Source: OMAM, 23/05/11
-2.5
-1.5
-0.5
0.5
1.5
US Euro UK Corporate
23 Old Mutual Asset Managers (UK)
Currency
Preparing for the US dollar to fall…
Building euro and commodity
currency positions
USD
Euro
Commodity
UK
Other
Source: OMAM, 23/05/11
We face some very large challenges going forwards
Protecting our clients’ money is going to be of utmost importance
We are going to need all the tools we can find to manage our way through
Conclusions
25
Important information
This investment presentation is for professional clients only and is not to be distributed to or relied upon by private investors.
This information is being communicated only to persons who have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001, as amended (the Order) and to persons to whom it may otherwise be lawful to communicate it to (all such persons being referred to as relevant persons). Other persons should not rely or act upon this document or any of its contents. The recipient should not use the information in this document in any way which would constitute 'market abuse'.
OMAM has no house market view and opinions expressed are the views of individual fund manager(s) as at the time of writing. Information and opinions have been compiled or arrived at by Old Mutual Asset Managers (UK) Limited (OMAM) from sources believed to be reliable, but neither OMAM nor Old Mutual Fund Managers Limited (OMFM) accepts liability for any loss arising from the use hereof nor makes any representation as to their accuracy or completeness. Any underlying research or analysis has been procured by OMAM for its own purposes and may have been acted on by OMAM or an associate for its or their own purposes.
This document does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. No representation or warranty, express or implied, is or will be made by OMAM, its advisors or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this document and any reliance you place on them will be at your sole risk. The Company: Old Mutual Dublin Funds plc, 1 North Wall Quay, Dublin 1, Ireland. The Company is an Irish law umbrella UCITS authorised by the Irish Financial Regulator. This fund is authorised by the Irish Financial Services Regulatory Authority and is registered for distribution in UK, Sweden, France and Switzerland.
Issued by Old Mutual Asset Managers (OMAM), the trading name of Old Mutual Asset Managers (UK) Limited and Old Mutual Fund Managers Limited. Old Mutual Asset Managers (UK) Limited, 2 Lambeth Hill, London EC4P 4WR, England. Registered in England No. 2949554. Authorised and regulated in the UK by the Financial Services Authority. Telephone calls may be recorded for security purposes and to improve our customer service. U5824/05/11