ESG WHAT REALLY MATTERS TO YOU? FEBRUARY 2020 OUR PALE BLUE DOT 2 - - PowerPoint PPT Presentation

▶
esg what really matters to you
SMART_READER_LITE
LIVE PREVIEW

ESG WHAT REALLY MATTERS TO YOU? FEBRUARY 2020 OUR PALE BLUE DOT 2 - - PowerPoint PPT Presentation

Jan 09, 2024 240 likes •531 views

ESG WHAT REALLY MATTERS TO YOU? FEBRUARY 2020 OUR PALE BLUE DOT 2 POPULATION GROWTH = DEMAND, COMPETITION 3 WHAT DOES A GIGTONNE OF CARBON LOOK LIKE? X 36 Billion Source: www.advancedsciencenews.com 4 HYPE VERSUS SUBSTANCE Source:

slide-1
SLIDE 1

ESG – WHAT REALLY MATTERS TO YOU?

FEBRUARY 2020

slide-2
SLIDE 2

2

OUR PALE BLUE DOT

slide-3
SLIDE 3

3

POPULATION GROWTH = DEMAND, COMPETITION

slide-4
SLIDE 4

4

WHAT DOES A GIGTONNE OF CARBON LOOK LIKE?

Source: www.advancedsciencenews.com

X 36 Billion

slide-5
SLIDE 5

5

HYPE VERSUS SUBSTANCE

Source: Bloomberg, 12 December 2019

slide-6
SLIDE 6

6

HOW DO WE MAKE A DIFFERENCE?

Source: www.fastcompany.com – article based on a new study from researchers at McMaster University

slide-7
SLIDE 7

7

SOCIAL ISSUES

"It's going to be much more expensive to raise money for projects, whether it's debt or equity, and it'll be more difficult to attract high level projects for now"

Source: Headline from article in www.forbes.com, quote from Hal Vogel, media analyst

The Weinstein Company Faces Serious Challenges

slide-8
SLIDE 8

8

FUNDS LAUNCHED IN 2019/2020

2957 991 500 1000 1500 2000 2500 3000 3500 4000 4500 Number of funds

Socially Conscious?

No Yes 448 36

  • 100

200 300 400 500 600 Asset size ($bn)

Socially Conscious?

No Yes

Source: Morningstar

slide-9
SLIDE 9

9

ESG SCREENING – AN INDUSTRY VIEW

slide-10
SLIDE 10

10

ESG IS IMPORTANT – BUT BE DISCERNING

“A pack of lemmings looks like a group

  • f rugged individualists compared with

Wall Street when it gets a concept in its teeth.” — Warren Buffett

Source – cartoon: Eric Allie

slide-11
SLIDE 11

11

EVER EXPANDING PRODUCT LIST, BUT WHO BENEFITS MOST?

  • Corporate Equality Index
  • Gender Diversity ETF
  • Patriotic Employers ETF (Military Veterans Index)
  • Catholic Values ETF
  • “Dump Trump” super option
slide-12
SLIDE 12

12

VALUES CAN BE HIGHLY SUBJECTIVE

Investor A Investor B Investor C Performance in terms

  • f non-financial values

Investment return 15% p.a. 15% p.a. 15% p.a.

slide-13
SLIDE 13

13

“TWO GOALS, TWO INSTRUMENTS”

PERFORMANCE VALUES

Quote: “Two goals, two instruments” – quoting Jan Tinbergen. Source: Gray, J. 2012. “Misadventures of an Irresponsible Investor.” Rotman International Journal of Pension Management. 5 (2): 9.

slide-14
SLIDE 14

14

OUR CONTROLLING SHAREHOLDER IS A CHARITABLE FOUNDATION

Allan & Gill Gray Foundation

Gray family excluded from economic benefit

Orbis Allan Gray Limited Orbis Allan Gray South Africa Allan Gray Australia

100% subsidiary

Dual purposes

Active strategic philanthropy aimed at promoting public benefit

  • r social improvement

Promote the commercial success, continuity and independence

  • f

the Orbis and Allan Gray groups

Delegation of oversight and support of Orbis and Allan Gray groups

Controlling interest

slide-15
SLIDE 15

15

MONITOR MANAGEMENT THROUGHOUT HOLDING PERIOD

Time Share Price Value Margin of Safety We start to buy here We start to sell here Our assessment of the company’s true value

slide-16
SLIDE 16

16

ALLAN GRAY APPROACH TO ESG

  • Shareholder’s interests - think like a business owner
  • Active engagement
  • Voting
  • Sustainability of company’s earnings
slide-17
SLIDE 17

17

CASE STUDY 1: ROC OIL

Source: Allan Gray Australia Quarterly Report June 2014

slide-18
SLIDE 18

18

CASE STUDY 1: ROC OIL

slide-19
SLIDE 19

19

CASE STUDY 1: ROC OIL

slide-20
SLIDE 20

20

CASE STUDY 1: ROC OIL

slide-21
SLIDE 21

21

CASE STUDY 2: TASSAL

$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00

Nov-03 Mar-04 Jul-04 Nov-04 Mar-05 Jul-05 Nov-05 Mar-06 Jul-06 Nov-06 Mar-07 Jul-07 Nov-07 Mar-08 Jul-08 Nov-08 Mar-09 Jul-09

Price

Source: Bloomberg

slide-22
SLIDE 22

22

CASE STUDY 2: TASSAL

slide-23
SLIDE 23

23

CASE STUDY 2: TASSAL – SHARE PRICE AND HOLDINGS

$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 5000 10000 15000 20000 25000 30000 2/02/2009 2/02/2010 2/02/2011 2/02/2012 2/02/2013 2/02/2014 2/02/2015

Share price Holdings (shares X 1000)

Holdings Price

slide-24
SLIDE 24

24

ALLAN GRAY FUNDS

Allan Gray Australia Balanced Fund Allan Gray Australia Equity Fund Allan Gray Australia Stable Fund

Stability and Lower Risk

Lower potential return

Higher potential long-term return

Higher investment risk and fluctuation

slide-25
SLIDE 25

25

ALLAN GRAY AUSTRALIA EQUITY FUND PERFORMANCE

Source: Allan Gray Australia as at 31 January 2020. Past performance is not indicative of future performance. Performance shown relates to Class A units

30 50 70 90 110 130 150 170 190 210 230 250 270 290 310 330 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Allan Gray Australia Equity Fund S&P/ASX 300 S&P/ASX Small Ordinaries

slide-26
SLIDE 26

26

ALLAN GRAY AUSTRALIA EQUITY FUND PERFORMANCE

Source: Allan Gray Australia Equity Fund Class A as at 31 January 2020. Past performance is not indicative of future performance. Performance shown is annualised.

17.1% 11.1% 11.7% 10.7% 8.6% 25.0% 12.4% 9.4% 9.0% 6.7%

0% 4% 8% 12% 16% 20% 24% 28% 1 year 3 Years 5 Years 10 Years Since launch Allan Gray Australia Equity S&P/ASX 300 Accumulation Index

slide-27
SLIDE 27

27

SUMMARY

  • ESG is important, but….
  • Be wary of ESG sales pitches
  • Consider “two goals, two instruments”
  • Use managers who fight for your clients
  • Allan Gray – pursuing clients interests is a key principle
slide-28
SLIDE 28

28

About this presentation

Objective of presentation To provide you with some key high level information about Allan Gray Australia, our investment philosophy and the following Funds: (i) the Allan Gray Australia Equity Fund, (ii) the Allan Gray Australia Balanced Fund, and (iii) the Allan Gray Australia Stable Fund. Please don’t take this presentation as an offer to sell or a recommendation that you should invest in any Fund. Before making an investment decision, please read the relevant Fund’s Product Disclosure Statement and Information Booklet (together PDS). The PDS is available from www.allangray.com.au free of charge. Issuer of units Equity Trustees Limited, AFSL No. 240975 Investment manager Allan Gray Australia Pty Ltd, AFSL No. 298487 Fund structure The Funds are managed investment schemes registered with the Australian Securities and Investments Commission. The Funds are also registered for promotion in New Zealand. No personal advice This presentation only provides general information or advice. It does not take into account any investor’s personal financial circumstances, objectives

  • r needs. Please read Allan Gray’s Financial Services Guide if you are interested in the benefits either entity is entitled to receive as an AFS licensee. The

FSG is available from our website. Risks There are risks with any investment, including one in the Funds. Please read the risk section of the relevant PDS for more details. Performance information Past performance is not a reliable indicator of future performance and the value of any investment in the Funds is not guaranteed. Unless otherwise indicated, returns information is net of fees and assumes reinvestment of distributions. Economic, market, index

  • r stock commentary

Such information is provided to indicate reasons for our investment decisions or represents our views on certain matters and based on certain assumptions and proprietary analysis. It is not intended to be personal financial advice. You should not rely on our commentary to make any investment

  • decision. This is because our views can and do change over time, or may turn out to be incorrect.

Other Finally, please seek professional advice, if necessary. We have tried to ensure the information in this presentation is accurate in all material respects but cannot provide any guarantee that it is.