GaveKal Platform Company Fund (UCITS) Performance Update September - - PowerPoint PPT Presentation

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GaveKal Platform Company Fund (UCITS) Performance Update September - - PowerPoint PPT Presentation

Sep 11, 2022 120 likes •395 views

Targeting Innovation. Targeting Innovation. Investing in knowledge worldwide. GaveKal Platform Company Fund (UCITS) Performance Update September 8, 2011 GaveKal Capital, LLC | 1099 18 th St., Suite 2780 | Denver, CO 80202 |

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SLIDE 1

Targeting Innovation. Investing in knowledge worldwide.

GaveKal Platform Company Fund (UCITS) Performance Update

September 8, 2011

GaveKal Capital, LLC | 1099 18th St., Suite 2780 | Denver, CO 80202 | www.GaveKalCapital.com

Targeting Innovation. Investing in knowledge worldwide.

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SLIDE 2

Targeting Innovation. Investing in knowledge worldwide. 2

YTD Through August 31 The Platform Company Fund is Up 2.94% while the MSCI World Index is Down 3.9%

16 16.5 17 17.5 18 18.5 19 19.5 20 20.5 21

Annualized Volatility %

  • 5
  • 4
  • 3
  • 2
  • 1

1 2 3 4 5

Annualized Return %

GaveKal Platform Company Fund MSCI World Index

GaveKal Platform Company Fund (UCITS)

Return & Volatility Relative to MSCI World Index Since Fund Inception - October 2006

'07 '08 '09 '10 '11 50 60 70 80 90 100 110 120 130 140

103.36 119.41

GaveKal Platform Company Fund (UCITS) Performance

Relative to MSCI World Index Performance

GaveKal Platform Company Fund MSCI World Index

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SLIDE 3

Targeting Innovation. Investing in knowledge worldwide.

Stock Market Discounting Economic Uncertainty

3

'07 '08 '09 '10 '11 30 35 40 45 50 55 60 65 8 10 12 14 16 18 20

12.55 50.60

United States

ISM Manufacturing & S&P500 P/E

Ism (Napm) Purchasing Managers Index - United States (Left) S&P 500 - Price to Earnings (Right)

'07 '08 '09 '10 '11 30 35 40 45 50 55 60 65 8 9 10 20 30 40 50 60 70 80 90

37.00 50.60

United States

VIX & ISM Index

Cboe: Market Volatility Index. (Right) Ism (Napm) Manufacturing, Purchasing Managers Index (Left)

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SLIDE 4

Targeting Innovation. Investing in knowledge worldwide.

European Problems Are Growing As Economy Weakens

4

'07 '08 '09 '10 '11 '12

  • 100
  • 80
  • 60
  • 40
  • 20

20 40 60 80 100

  • 8
  • 6
  • 4
  • 2

2 4 6 8

  • 37.60
2.76

Germany

ZEW Balance of Expectations & Real GDP

(% 1YR) Real GDP, Total, SA/CA X12-ARIMA, _2005=100 - Germany (Right) (LEAD 1Y) Surveys, ZEW Financial Market Survey, Economic Expectations, Germany (ZEW Indicator of Economic Sentiment ), Balance, NSA - Germany (Left)

'07 '08 '09 '10 '11 '12 2 4 6 8 10 12 14 16 18 20

  • 6
  • 4
  • 2

2 4 6

0.79 1.72

Eurozone

M1 Growth & Real GDP

(LEAD 1Y , % 1YR) Monetary Aggregates, Levels (End-Of-Period), Monetary Aggregate M1 (Euro Area Changing Composition, Sa, Bil. Euros) - Eurozone (Left) (% 1YR) Gross Domestic Product At Market Prices, Mil Of Euro (Chained 2000 Prices), Real, Sa, Wda - Euro Area (Right)

'02 '03 '04 '05 '06 '07 '08 '09 '10 '11

  • 40
  • 30
  • 20
  • 10

10 20 30 40

  • 7.22
  • 6.55
  • 5.89
  • 5.92
  • 4.72

OECD Leading Inicators - Europe

1 Quarter Annualized Change

(% 1Q Ann) Emu Cli Leading Indicator Amplitude Adjusted, Stock Or Quantum, Amp Adj - Euro Zone (% 1Q Ann) Fra Cli Leading Indicator Amplitude Adjusted, Stock Or Quantum, Amp Adj - France (% 1Q Ann) Deu Cli Leading Indicator Amplitude Adjusted, Stock Or Quantum, Amp Adj - Germany (% 1Q Ann) Ita Cli Leading Indicator Amplitude Adjusted, Stock Or Quantum, Amp Adj - Italy (% 1Q Ann) Nld Cli Leading Indicator Amplitude Adjusted, Stock Or Quantum, Amp Adj - Netherlands

10/09 1/10 4/10 7/10 10/10 1/11 4/11 7/11 20 20 30 30 40 40 50 50 60 60 70 70 80 80 90 90 100 100 200 200 300 300 400 400 500 500 600 600 700 700 800 800 900 900 1,000 1,000

98.96 196.87 412.02 445.47 681.76 904.47

European Sovereign Credit Default Swaps

France CDS 10Y, Mid, Basis Point - Yield Germany CDS 10Y, Mid, Basis Point - Yield Ireland CDS 10Y, Mid, Basis Point - Yield Italy CDS 10Y, Mid, Basis Point - Yield Portugal CDS 10Y, Mid, Basis Point - Yield Spain CDS 10Y, Mid, Basis Point - Yield

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SLIDE 5

Targeting Innovation. Investing in knowledge worldwide.

Foreboding Economic Statistics

5

'02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 20 30 40 50 60 70 80

  • 15
  • 10
  • 5

5 10 15

51.80 1.78

United States

ISM Employment Index & Manufacturing Employment

(LEAD 4M) Ism (Napm) Manufacturing, Employment, Index - United States (Left) (% 1YR) All Employees, Thousands Manufacturing Sa - United States (Right) Recession Periods - United States

'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 35 40 45 50 55 60 65 70

  • 6
  • 4
  • 2

2 4 6 8 10

53.57 3.66

United States

Non-Manufacturing ISM & GDP

(% 1YR) National Product Account Gross Domestic Product Overall Total, USD, Annual Rate, SA - United States (Right) Business Surveys ISM (NAPM) Non-manufacturing Business activity, SA - United States (Left) Recession Periods - United States '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 30 35 40 45 50 55 60 65 70

  • 20
  • 15
  • 10
  • 5

5 10 15 20

50.60 3.70

United States

ISM and Industrial Production

Ism (Napm) Manufacturing, Purchasing Managers Index - United States (Left) (% 1YR) Industrial Production, Total Index, Sa - United States (Right) Recession Periods - United States

'92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 30 35 40 45 50 55 60 65

  • 6
  • 4
  • 2

2 4 6 8 10

50.60 3.66

United States

Manufacturing ISM & GDP

Business Surveys ISM (NAPM) Manufacturing PMI total, SA - United States (Left) (% 1YR) National Product Account Gross Domestic Product Overall Total, USD, Annual Rate, SA - United States (Right) Recession Periods - United States

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SLIDE 6

Targeting Innovation. Investing in knowledge worldwide.

Growth Expectations Sinking Fast

6

May Jun Jul Aug Sep 1.6 1.8 2 2.2 2.4 2.6 2.8 3 3.2 3.4

Cy1 Cy1 Cy1 Cy1 Cy2 Cy2 Cy2 Cy2

United States

Real GDP Estimates 2011 & 2012

Nov Dec Jan Feb Mar Apr May Jun Jul Aug

  • 0.5

0.5 1 1.5 2 2.5 3 3.5 4 QE2 announced - 10 year TIPS yield .48% QE2 announced - breakeven inflation 2.1% QE2 announced - 10 year yield 2.58%

0.00 1.98 2.02

United States

10 Year Nominal Yields, TIPS & Breakeven Inflation

10-Year Tips Breakeven Inflation 10-Year Yield

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SLIDE 7

Targeting Innovation. Investing in knowledge worldwide.

Employment & Income is Sputtering

7

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 40,000 45,000 50,000 55,000 60,000 65,000 70,000

  • 8,000
  • 6,000
  • 4,000
  • 2,000

2,000 4,000

46440.00 47462.00 1022.00

United States

JOLTS - 12 Month Net Employment

Net Employment (Right) (MSUM 1Y) Hires, Total Nonfarm, Total US, Level - In Thousands, SA (JOLTS) - United States (Left) (MSUM 1Y) Total Separations, Total Nonfarm, Total US, Level - In Thousands, SA (JOLTS) - United States (Left) '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11

  • 10
  • 10
  • 5
  • 5

5 5 10 10 15 15

3.00 3.40

United States

Nominal Income Proxy

(% 1Q Ann) Payroll Employment * Average Weekly Hours * Average Hourly Earnings (% 1YR) Payroll Employment * Average Weekly Hours * Average Hourly Earnings Recession Periods - United States

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SLIDE 8

Targeting Innovation. Investing in knowledge worldwide.

Savings Are Depleted & Misery Soaring

8

'87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10

  • 600
  • 600
  • 400
  • 400
  • 200
  • 200

200 200 400 400 600 600 800 800

  • 208.28

United States

Total Net Savings (Private & Public)

Gross saving, F.8 - Flows, SAAR - United States

'62 '64 '66 '68 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 70 70 80 80 90 90 100 100 110 110 120 120 130 130 140 140

136.00

United States

Misery Index

(1-Participation Rate) + Oil Price/10 + % of Debt Held by the Public

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SLIDE 9

Targeting Innovation. Investing in knowledge worldwide.

Credit Conditions Still Tough in the US

9

'62 '64 '66 '68 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 1.3 1.3 1.4 1.4 1.5 1.5 1.6 1.6 1.7 1.7 1.8 1.8 1.9 1.9 2 2 2.1 2.1 2.2 2.2

Velocity

  • f

Modified M2 Velocity

  • f M2

United States

Velocity of M2 & Modified M2

'07 '08 '09 '10 '11 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000 2,200,000 2,400,000

  • 100
  • 50

50 100 150 200

  • 25.60
1097803.00

United States

Total Commerical Paper Outstanding

Commercial Paper Outstanding, Sa, Millions Of U.S. Dollars - United States (Left) (% 1Q Ann) Commercial Paper Outstanding, Sa, Millions Of U.S. Dollars - United States (Right)

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SLIDE 10

Targeting Innovation. Investing in knowledge worldwide.

Recession From These Levels Hard To Imagine

10

'91 '92 '93 '94 '95 '96 '97 '98 '99 80 80 100 100 120 120 140 140 160 160 180 180 200 200 220 220 240 240 260 260

8% Growth Corporate CapEx 10% Growth

United States

1990s Non-Residential Investment Trend Growth

Period: 4/30/1991 - 12/31/1999

Corporate CapEx 8% Growth 10% Growth

'62 '64 '66 '68 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 11 11 12 12 13 13 14 14 15 15 16 16 17 17 18 18 19 19 20 20

12.27

United States

Gross Private Fixed Investment as a % GDP

'09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 80 80 100 100 120 120 140 140 160 160 180 180 200 200 220 220 240 240

Corporate CapEx 2% Growth 5% Growth 8% Growth

United States

2009's Non-Residential Investment Trend Growth

Period: 6/30/2009 - Current

Corporate CapEx 2% Growth 5% Growth 8% Growth

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 80 80 90 90 100 100 110 110 120 120 130 130 140 140 150 150

Corporate CapEx 2% Growth 3% Growth

United States

2000's Non-Residential Investment Trend Growth

Period: 12/31/1999 - Current

Corporate CapEx 2% Growth 3% Growth

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SLIDE 11

Targeting Innovation. Investing in knowledge worldwide.

Defensive Leadership After QE2

11

10/09 1/10 4/10 7/10 10/10 1/11 4/11 7/11

  • 200,000
  • 100,000

100,000 200,000 300,000 400,000 500,000 1,000 1,050 1,100 1,150 1,200 1,250 1,300 1,350 1,400 End of QE2 Jackson Hole speech announcing QE2

United States

Assets of FRB & SP500

(DIFF 5M) H.4.1- Assets Of All Federal Reserve Banks, Total Assets (Mil $) - United States (Left) S&P 500 - Price (Right)

10/09 1/10 4/10 7/10 10/10 1/11 4/11 7/11 86 86 88 88 90 90 92 92 94 94 96 96 98 98 100 100 102 102 104 104 106 106 Mubarek steps down in Egypt

102.85 GaveKal Research

Counter Cyclicals relative to Early, Late & Hyper Cyclicals

MSCI World Index

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SLIDE 12

Targeting Innovation. Investing in knowledge worldwide.

Multiple Contraction Seems Likely

12

'07 '08 '09 '10 '11 '12 76 78 80 82 84 86 88 90 92 94 9 10 11 12 13 14 15 16 17 18 19

77.84 12.42

United States

The Dollar vs Forward P/E Correlation: 0.85

(LEAD 3Q) Real Trade-Weighted Exchange Rate Index, Major Currencies, 3/1973=100 - United States (Left) S&P 500 - Price to Earnings - FY1 (Mean) (Right)

'07 '08 '09 '10 '11 1.5 2 2.5 3 3.5 4 4.5 5 5.5 8 9 10 11 12 13 14 15 16 17

1.98 10.86

United States

S&P500 Forward P/E & 10-Year Treasury Yield

S&P 500 - Price to Earnings Ratio (Right) US Treasury Constant Maturity - 10 Year - Yield (Left)

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SLIDE 13

Targeting Innovation. Investing in knowledge worldwide. 13

Fund Positioning is Defensive

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SLIDE 14

Targeting Innovation. Investing in knowledge worldwide. 14

Japan Offers Efficient Diversification

'07 '08 '09 '10 '11 0.1 0.1 0.2 0.2 0.3 0.3 0.4 0.4 0.5 0.5 0.6 0.6 0.7 0.7 0.8 0.8 0.9 0.9 1 1

0.33 0.90 0.96

MSCI Japan, MSCI Europe and MSCI North America

Rolling 65 Day Correlation of 1 Day Returns with MSCI World Index

MSCI Japan Correlation with MSCI World MSCI Europe Correlation with MSCI World MSCI North America Correlation with MSCI World

'07 '08 '09 '10 '11 70 80 90 100 110 120 130 0.5 1 1.5 2 2.5 3 3.5 4 4.5

0.06 77.11

Yen/USD and US-Japan Yield Differential

FX Rate - Spot Mid - Japanese Yen per US Dollar (Left) United States 2 Year Treasury Yield minus Japan 2 Year Treasury Yield (Right)

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SLIDE 15

Targeting Innovation. Investing in knowledge worldwide. 15

Domestic Oriented Sectors Outperform Exporters

Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug 85 90 95 100 105 110

Japan

Domestic Sectors vs Export Oriented Sectors

Domestic Sectors=Consumer Staples, Health Care, Telecom Export Sectors=Consumer Discretionary, Energy, Industrials, Information Technology, Materials

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SLIDE 16

Targeting Innovation. Investing in knowledge worldwide. 16

Cheap Valuations for Domestically Oriented Companies

'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 1 2 3 4 5 6 7 8 9 10

1.43 2.37 2.76

MSCI Japan, MSCI Europe and MSCI North America

Health Care Price to Book Value

MSCI Japan / Health Care -SEC - Price to Book Value Ratio MSCI Europe / Health Care -SEC - Price to Book Value Ratio MSCI North America / Health Care -SEC - Price to Book Value Ratio Recession Periods - United States

'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 2 4 6 8 10 12

1.26 2.73 3.15

MSCI Japan, MSCI Europe and MSCI North America

Consumer Staples Price to Book Value

MSCI Japan / Consumer Staples -SEC - Price to Book Value Ratio MSCI Europe / Consumer Staples -SEC - Price to Book Value Ratio MSCI North America / Consumer Staples -SEC - Price to Book Value Ratio Recession Periods - United States

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SLIDE 17

Targeting Innovation. Investing in knowledge worldwide. 17

Relative Performance Tracks Relative Earnings

Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug 0.047 0.048 0.049 0.05 0.051 0.052 0.053 0.054 0.16 0.165 0.17 0.175 0.18 0.185 0.19 0.195 0.2 0.205 0.21

0.05 0.20

MSCI Japan / Health Care -SEC

Forward 12 Months EPS Performance Relative to MSCI Japan

MSCI Japan / Health Care -SEC - Forward 12 Months EPS Relative to MSCI Japan (Left) MSCI Japan / Health Care -SEC - Price / MSCI Japan - Price (Right)

Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug 0.029 0.03 0.031 0.032 0.033 0.034 0.035 0.115 0.12 0.125 0.13 0.135 0.14 0.145 0.15

0.03 0.15

MSCI Japan / Consumer Staples -SEC

Forward 12 Months EPS Performance Relative to MSCI Japan

MSCI Japan / Consumer Staples -SEC - Forward 12 Months EPS Relative to MSCI Japan (Left) MSCI Japan / Consumer Staples -SEC - Price / MSCI Japan - Price (Right)

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SLIDE 18

Targeting Innovation. Investing in knowledge worldwide. 18

Japanese Pharmaceuticals Have Been A Featured Group This Year

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SLIDE 19

Targeting Innovation. Investing in knowledge worldwide. 19

Strong and Stable Long-term Growth Record Illustrates Defensiveness

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SLIDE 20

Targeting Innovation. Investing in knowledge worldwide. 20

Very Strong Balance Sheets

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SLIDE 21

Targeting Innovation. Investing in knowledge worldwide. 21

Huge Free Cash Flow & Low Payouts

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SLIDE 22

Targeting Innovation. Investing in knowledge worldwide. 22

Could Use More Leverage…

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SLIDE 23

Targeting Innovation. Investing in knowledge worldwide. 23

Huge Fiscal Contraction Scheduled in the US

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SLIDE 24

Targeting Innovation. Investing in knowledge worldwide. 24

Two Phase Adjustment, With Phase One Representing 7% of GDP Over Next 3 Years

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Targeting Innovation. Investing in knowledge worldwide. 25

Phase One Adjustment Rests on Higher Income Taxes

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SLIDE 26

Targeting Innovation. Investing in knowledge worldwide. 26

Phase One Stabilizes Debt at 72% if Successful…A Big If Depending On Obama Speech Tonight

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SLIDE 27

Targeting Innovation. Investing in knowledge worldwide.

For investors interested in the GaveKal Platform Strategy, please contact Chris Lightbound at clightbound@gavekal.com or +852-2869-8363.

GaveKal Capital, LLC | 1099 18th St., Suite 2780 | Denver, CO 80202 | www.GaveKalCapital.com