WELCOME
Knowledge Exchange 2018
1
Janus Henderson Investors (Australia) Funds Management Limited
Level 36, Grosvenor Place, 225 George Street, Sydney NSW 2000
T +61 (0)2 8298 4000 F +61 (0)2 8298 4001
Important information
This information is solely intended for the use of wholesale clients and is not for general public distribution. This document is issued by Janus Henderson Investors
(Australia) Funds Management Limited (AFSL 444268, ABN 43 164 177 244) (‘Janus Henderson’).
The information provided in this document is confidential and is for the sole use of the recipient. It may not be disclosed, copied or distributed in any form without
the express permission of Janus Henderson and to the extent that it is passed on, care must be taken to ensure that this is in a form which accurately reflects the
information presented here.
Whilst Janus Henderson believe that the information is correct at the date of this document, no warranty or representation is given to this effect and no
responsibility can be accepted by Janus Henderson to any end users for any action taken on the basis of this information. The information herein shall not in any
way constitute advice or an invitation to invest. It is solely for information purposes and subject to change without notice.
Past performance is not indicative of future performance.
No representation or warranty is given as to the likelihood of achievement of any forward-looking statement in this document, or any events or results expressed
or implied in any forward-looking statement. Such statements are not guarantees of future performance and are by their nature subject to significant uncertainties,
risks and contingencies. Actual results or events may differ materially from any expressed or implied in any forward-looking statement and deviations are both
normal and to be expected.
All opinions and estimates in this information are subject to change without notice. Janus Henderson is not under any obligation to update this information to the
extent that it is or becomes out of date or incorrect.
Janus Henderson Investors Australia is the name under which Janus Henderson Investors Australia Limited (ABN 47 124 279 518), Janus Henderson Investors
(Australia) Funds Management Limited (AFSL 444268, ABN 43 164 177 244) and Janus Henderson Investors (Australia) Institutional Funds Management Limited
(AFSL 444266, ABN 16 165 119 531) operate. These companies are wholly owned subsidiaries of Janus Henderson Group plc (incorporated in Jersey, registered
no.101484, registered office 47 Esplanade, St Helier, Jersey JE1 0BD).
© Janus Henderson Investors. Janus Henderson, Janus, INTECH and Perkins are trademarks of Janus Henderson Investors. The name Janus Henderson
Investors includes HGI Group Limited, Henderson Global Investors (Brand Management) Sarl and Janus International Holding LLC.
2
Janus Henderson Investors (Australia) Funds Management Limited
Level 36, Grosvenor Place, 225 George Street, Sydney NSW 2000
T +61 (0)2 8298 4000 F +61 (0)2 8298 4001
Researcher disclaimer
The Lonsec Ratings (assigned as follows: Janus Henderson Tactical Income Fund - October 2017; Janus Henderson Global Fixed Interest Total Return Fund -
October 2017; Janus Henderson Global Equity Income Fund – February 2018) presented in this document are published by Lonsec Research Pty Ltd ABN 11 151
658 561 AFSL 421 445. The Ratings are limited to “General Advice” (as defined in the Corporations Act 2001 (Cth)) and based solely on consideration of the
investment merits of the financial products. Past performance information is for illustrative purposes only and is not indicative of future performance. It is not a
recommendation to purchase, sell or hold Janus Henderson Investors products, and you should seek independent financial advice before investing in these
products. The Ratings are subject to change without notice and Lonsec assumes no obligation to update the relevant documents following publication. Lonsec
receives a fee from the Fund Manager for researching the products using comprehensive and objective criteria. For further information regarding Lonsec’s Ratings
methodology, please refer to our website at: http://www.lonsecresearch.com.au/research-solutions/our-ratings.
The Zenith Investment Partners (“Zenith”) Australian Financial Services License No. 226872 rating (assigned as follows Janus Henderson Tactical Income Fund
June 2017; Janus Henderson Global Emerging Markets Equity Fund - October 2017; Janus Henderson Global Fixed Interest Total Return Fund - March 2017;
Janus Henderson Global Equity Income Fund – November 2017) referred to in this document is limited to “General Advice” (as defined by the Corporations Act
2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual. It is not a
specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment
decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of,
and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Zenith
usually charges the product issuer, fund manager or a related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings
definitions and regulatory compliance are available on our Product Assessment’s and at http://www.zenithpartners.com.au/RegulatoryGuidelines.
3
Agenda
Details Speaker
Welcome Matt Gaden
Head of Distribution
Australian fixed interest
Jay Sivapalan
Portfolio Manager, Australian Fixed Interest
Global fixed interest Andrew Mulliner
Portfolio Manager, Global Fixed Interest
Global equity income Andrew Jones
Portfolio Manager, Global Equity Income
Global emerging markets
Glen Finegan
Head of Global Emerging Market Equities
Ian Tabberer
Portfolio Manager, Global Emerging Market
Equities
Conclusion Matt Gaden
Head of Distribution
4
Performance
Janus Henderson Tactical Income Fund
Period to:
31 January 2018
1 year
(%)
3 years
(% p.a.)
5 years
(% p.a.)
Since inception
(% p.a.)
Performance 3.17 2.99 3.68 5.60
Benchmark 2.26 2.23 3.24 4.39
Excess returns (net) 0.91 0.76 0.44 1.21
Source: Janus Henderson Investors, as at 31 January 2018. Inception date: 31 June 2009.
Benchmark: Bloomberg AusBond Bank Bill Index and Bloomberg AusBond Composite 0+ Yr Index (equally weighted)
Note: Past performance is not indicative of future performance.
• All major platforms
Platform availability Researcher rating
5
Performance
Janus Henderson Global Fixed Interest Total Return Fund
Period to:
31 January 2018
1 year
(%)
2 years
(% p.a.)
3 years
(% p.a.)
Since inception
(% p.a.)
Performance 6.49 6.53 5.22 4.63
Benchmark1 1.50 1.59 1.75 1.87
Excess returns (net) 4.99 4.94 3.47 2.76
Benchmark2 3.58 3.82 3.42 4.71
Excess returns (net) 2.91 2.71 1.80 -0.08
Source: Janus Henderson investors, as at 31 January 2018. Inception date: 1 July 2014.
Benchmark: 1Reserve Bank of Australia Cash Rate. 2Barclays Multiverse Index hedged in Australian dollars.
Note: Past performance is not indicative of future performance.
• ANZ Grow Wrap
• BT Wrap
• IOOF
• Linear
• Netwealth
• OneAnswer
Platform availability Researcher rating
6
Performance
Janus Henderson Global Equity Income Fund
Source: Janus Henderson Investors, as at 31 January 2018. Inception date: 1 May 2015.
Benchmark: MSCI World ex-Australia Index (net dividends reinvested) in AUD.
Note: Past performance is not indicative of future performance.
Period to:
31 January 2018
1 year
(%)
2 years
(% p.a.)
Since inception
(% p.a.)
Performance 18.03 9.06 6.94
Benchmark 18.15 13.41 8.93
Excess returns (net) -0.12 -4.35 -1.99
• AMP North/My North
• Hub 24
Platform availability Researcher rating
7
Performance
Janus Henderson Global Emerging Markets Equity Fund
Source: Janus Henderson Investors, as at 31 January 2018. Inception date: 29 July 2016.
Benchmark: MSCI Emerging Markets Index (net dividends reinvested) in AUD.
Note: Past performance is not indicative of future performance.
Period to:
31 January 2018
1 year
(%)
Since inception
(% p.a.)
Performance 21.79 13.34
Benchmark 32.20 23.13
Excess returns (net) -10.41 -9.79
• BT Wrap
• BT Panorama
• Netwealth
• Powerwrap
Platform availability Researcher rating
Weathering all seasons:
Australian fixed interest
Jay Sivapalan
Portfolio Manager, Australian Fixed Interest
9
Ten years on…
Government yield (10yr) Government yield (10yr)
0
1
2
3
4
5
6
7
2008 2010 2012 2014 2016 2018
US
Australia
0
100
200
300
400
500
600
700
2008 2010 2012 2014 2016 2018
Australia
US
%
Basis
poin
ts (
bps)
Source: Janus Henderson Investors and Bloomberg, as at 15 February 2018.
10
Australian economy in a nutshell
GDP growth Unemployment Wages growth
Source: Australian Bureau of Statistics, as at 19 February 2018.
Note: GDP growth: Janus Henderson Investors forecasts of y/y GDP growth with percentage point contributions from GDP components.
Unemployment: Forecast numbers are estimated projections only based on RBA research.
Wages growth: Wage Price Index y/y % growth.
-1.50 -0.50 0.50 1.50 2.50 3.50
Consumption
Housing
Business investment
Public sector
Net exports
Stat discrepancy
GDP: 3.0%
Stocks
3
4
5
6
7
2006 2009 2012 2015 2018
%
RBA estimate of full employment rate
RBA forecast
1
2
3
4
5
2006 2008 2011 2014 2017
11
What’s priced in
United States
Source: Janus Henderson Investors and Bloomberg, as at 16 February 2018.
Note: Cash rate expectations represent cash futures contracts and OIS forward 1m cash rate.
2016: Cash rate expectation as at 2 August 2016. 2018: Cash rate expectation as at 16 February 2018.
Forecast numbers are estimated projections only based on internally generated research.
Cash rate expectations
Australia
Europe
-1
2
5
2007 2011 2015 2019 2023
%
%
%
-1
2
5
2007 2011 2015 2019 2023
0
1
2
3
4
5
6
7
8
2007 2011 2015 2019 2023
2.5%
0.5%
2.5%
Actual 2016 2018
Legend:
12
Rising tide lifts all boats
Source: Janus Henderson Investors and Bloomberg, as at 15 February 2018.
Note: For illustrative purposes only.
References made to individual securities should not constitute or form part of any offer or solicitation to issue, sell, subscribe or purchase the security research.
Australian government yield curve
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
1 2 3 4 5 6 7 8 9 10
%
2018
2017
2016
Macquarie Group
Transurban
Dexus Asciano
Term (years)
13
Relative value
Infrastructure Utilities
Source: Janus Henderson Investors and CBA Credit, as at 31 January 2018.
Asset swap spreads
Ba
sis
po
ints
(b
ps)
0
50
100
150
200
250
300
350
2000 2006 2012 2018
0
50
100
150
200
250
300
350
2000 2006 2012 2018
Ba
sis
po
ints
(b
ps)
14
Corporate debt
Multinet Gas
Key features
• Gas distribution in Melbourne
• High barriers to entry
• Strong operating cash flows
• Improving efficiency
• Stable credit
Summary information
Maturity: December 2024
Rating: BBB+
Current yield: 3.83%
Risk free rate: 2.65%
Spread 1.18%
Source: Janus Henderson Investors and Bloomberg, as at 14 February 2018.
Note: Image sourced: https://oilprice.com/Latest-Energy-News/World-News/Latin-American-Energy-Outlook-Natural-Gas-Leads-The-Way.html.
References made to individual securities should not constitute or form part of any offer or solicitation to issue, sell, subscribe or purchase the security research.
15
What’s keeping markets awake?
Source: Images sourced from Google (royalty free icons).
16
Managing the downside
Monthly returns Interest rate risk
Janus Henderson Tactical Income Fund
Du
ratio
n (
ye
ars
)
Source: Janus Henderson Investors and Bloomberg, as at 30 January 2018.
Note: Australian bond market represented by Bloomberg AusBond Composite 0+ Yr Index.
Fund = Janus Henderson Tactical Income Fund.
Benchmark = Bloomberg AusBond Bank Bill Index and Bloomberg AusBond Composite 0+ Yr Index equally weighted.
Net performance. Past performance is no guarantee of future results.
-2%
-1%
1%
2%
3%
4%
2009 2011 2013 2015 2017
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2010 2012 2014 2016 2018
Benchmark
Fund
Australian bond market Fund
17
Weathering all seasons
• Central banks removing easy monetary policy…already priced in.
• Ultimately, higher yields a good thing for investors and restores
defensive attributes.
• Growth and inflation surprises could cause turbulence.
Defensive strategies with ample flexibility to
manage interest rate risk are
best placed to weather all seasons.
Opportunities abroad:
Global Fixed Interest
Andrew Mulliner
Portfolio Manager, Global Fixed Interest
19
Why Australians should travel abroad
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
Au
str
alia
10y U
S
Ja
pa
n
Ge
rma
ny
(AA
A)
Fra
nce
(AA
)
Spain
(BB
B+
)
Ita
ly (
BB
B)
Au
sB
on
dC
red
it0
+
Eu
rop
ea
nIG
co
rps
US
D IG
co
rps
£ IG
co
rps
EM
IG
co
rps
Eu
rop
ea
nH
Y c
orp
s
US
HY
co
rps
EM
HY
co
rps
Local
FX hedged to AUD
Higher yields available outside Australia (after hedging)!
Yie
ld (
%)
Source: Janus Henderson Investors and Bloomberg, as at 24 January 2018.
Note: Assume 1-year holding period and 3-month FFX hedge.
20
Opportunities but flexibility required
Significant dispersion of returns within fixed income
Cash Emerging market debt Asset Backed Securities
US Treasuries Global investment grade corporates Secured Loans
US Treasuries inflation-linked Global High Yield Australia Broad Market
Difference between best and worst performer
11.2% 43.6% 64.4% 15.0% 15.6% 18.4% 18.4% 7.5% 10.4% 15.5% 11.6%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
12.1% 14.0% 60.7% 15.3% 14.1% 18.9% 9.0% 7.8% 3.6% 16.2% 12.7%
11.6% 11.1% 47.5% 14.0% 9.8% 17.1% 7.1% 7.7% 0.8% 10.4% 8.0%
9.1% 3.8% 25.9% 10.8% 6.8% 10.8% 4.4% 6.0% 0.3% 8.0% 5.8%
5.6% -1.1% 16.3% 8.8% 5.0% 10.8% 0.3% 4.5% 0.3% 6.1% 5.3%
3.4% -4.8% 12.4% 7.4% 3.2% 10.4% 0.1% 3.3% -0.1% 4.8% 3.3%
2.3% -8.6% 10.0% 6.3% 2.8% 7.3% -0.7% 2.5% -0.2% 1.6% 3.1%
1.8% -22.2% 1.0% 5.9% 0.3% 3.9% -3.4% 2.1% -1.7% 1.6% 2.4%
1.7% -27.0% -1.8% 1.4% -0.8% 2.2% -7.1% 0.9% -2.0% 1.1% 1.4%
0.9% -29.6% -3.7% 0.3% -1.5% 0.5% -9.4% 0.3% -6.6% 0.7% 1.1%
Source: Merrill Lynch, Credit Suisse, Barclays, as at 31 December 2017.
Note: Merrill Lynch indices: ML US Treasury master (G0Q0); ML US Treasuries inflation-linked (G0QI); ML Global broad market corporates (G0BC) hedged to USD; ML Australia
broad market (AUD0) hedged to USD; ML Global High Yield (HW00) hedged to USD); ML US 3-month constant maturity overnight Libor; Credit Suisse Western European
Leveraged Loans Index; Barclays Pan European 50/50 AAA/AA ABS FRN Composite Index (EUR); Emerging market debt is 50/50 blend of JPM GBI EM local currency.
index in USD and JPM EMBI Global Diversified Index.
21
Everything is awesome!
Global PMIs* suggest the global economy continues to rebound
PMI above 50
PMI below 50
PMI above 55
PMI below 45
Source: Bloomberg, as of 31 December 2017.
Note: A reading above 50 (green areas) implies expansion and a reading below 50 implies contraction (yellow and orange areas).
*The Purchasing Managers' Index (PMI) is an indicator of the economic health of the manufacturing sector. The PMI is based on five major indicators: new orders,
inventory levels, production, supplier deliveries and the employment environment.
22
Where’s my Philips curve?
US Germany
0
2
4
6
8
10
12
1988 1996 2004 2012
Unemployment Rate (%)
Avg. Hourly Earnings (yoy %)
-4
-2
0
2
4
6
8
10
12
14
1992 1998 2004 2010 2016
Unemployment Rate (%)
Employee Compensation per Hour (yoy %)
Source: Bloomberg, as of 31 December 2017.
23
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2007 2009 2011 2013 2015 2017 2019
US Fed
Bank of England
European Central Bank
Bank of Japan
Peak central bank stimulus in the past
A slow rollover in G4 Central Bank Assets (US$bn)
• FED reducing
balance sheet
• ECB to end asset
purchases in 2018
• BOE halts QE
program Mar-17
• BOJ introduces
yield curve control
Bill
ions (
$)
Source: Datastream, as at 31 December 2017.
Note: Forecasts for periods beyond this date shown in diamond shaded area.
24
Clouds on the horizon?
G7 + E7 Industrial Output and Real Narrow Money (% 6M)
Source: Datastream, as at 31 December 2017.
-15.0
-10.0
-5.0
0.0
5.0
10.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Industrial Output
Real Narrow Money
Peak in narrow money: June 2017
Industrial output peaks March 2018?
25
What drives positioning?
Building blocks of asset allocation
Expected return
Volatility
Asset correlation
26
Strength in depth: coverage across fixed income
Source: Janus Henderson Investors, as at 28 September 2017.
110 investment professionals in US, Europe and Australia
Credit Research
(21)
Portfolio
Managers (14)
Central Dealing Team (12)
Analysts (4)
Portfolio
Managers (1)
Client Portfolio Managers (8)
Portfolio
Managers /
Analysts (4)
Investment Strategy Group
Emerging Market
Credit
Corporate credit – Investment grade
and high yield
Rates &
Government
Bonds
Analysts (4)
Portfolio
Managers (2)
Portfolio Analysts
(2)
Secured Loans
Analysts (4)
Portfolio
Managers (4)
Securitised
27
0% 10% 20% 30% 40% 50% 60% 70%
Govt - Fixed Interest
Govt - Index Linked
Govt - Emerging Markets
Corporate - Investment Grade
Corporate - Emerging Markets
Corporate - High Yield
Secured Loans and FRNs
Asset or Mortgage Backed
Cash and Derivatives
Feb-18
Government
Corporate
Secured
Duration range: 0 – 6 years
Source: Janus Henderson Investors, as at 15 February 2018.
Note: * Typical range is 0-20%, however this may be increased to 50% in exceptional circumstances.
Where do we see the opportunity?
% of NAV
*
28
Opportunistic government bond exposure
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2012 2013 2014 2015 2016 2017
Du
ratio
n c
on
trib
ution
(ye
ars
)
Source: Janus Henderson Investors, as at 31 December 2017.
Government bond
holdings
• Australia 30y
• Canada 5y
• 30y Euro interest
rate swaps
• Spain 30yr
• Portugal 7yr, 30yr
• US 5yr
• Japan Inflation-
linked
Targeted approach to duration
Global Fixed Interest Total Return Strategy (duration)
29
Secured credit offers uncorrelated opportunities
0.5
-0.2
0.5 0.8
1.2 1.4
-2.4 -2.6
-2.3
-1.8
-2.2
-2.7
-1.5
0.6
1.7
-3.5
-2.5
-1.5
-0.5
0.5
1.5
2.5
ABS Loans Corporate bonds Global Govt High yield
Source: Janus Henderson Investors and Bloomberg, as at 31 December 2017.
Note: Based on total return of the following – ABS and Loans show returns on fund sleeve holdings. Government Bonds- BoA Merrill Lynch G7 Government Index (hedged to
USD); Corporate Bonds- BoA Merrill Lynch Global Corporate Bond Index (hedged to USD); High yield Corporate Bonds - BoA Merrill Lynch Global High Yield Index
(hedged to USD).
% Q2 2013 “Taper Tantrum” Q2 2015 Q4 2016 “Trump Reflation”
Floating rate resilience during rates market volatility
30
0 50 100 150
B
BB
BBB
A
AsiaEMEALatAm
EM Credit pays you for better fundamentals
Spread per turn of leverage by rating
0 20 40 60 80
B
BB
BBB
A
EM
US
Source: BofA Merrill Lynch Global Research, as at December 2017.
Credit rating Credit rating
Investors get a better compensation for holding EM balance sheet risk
31
A truly global portfolio
5yr Canadian Gov’ts
US steepener
Argentine provinces Nigeria telecoms
Spain & Portugal
30yr Gov’ts
European secured loans
Long NOK vs EUR
Euro Financials
Long CZK vs CHF
Egypt Gov’ts 30yr Australia Gov’ts
Long SOEs &
property developers
Selective US
high yield
Long UK non
conforming ABS
The more things change,
the more they stay the same:
Global Equity Income
Andrew Jones
Portfolio Manager, Global Equity Income
33
The importance of dividends
John D. Rockefeller
“Do you know the only thing that gives me pleasure? It’s to see my
dividends coming in.”
Jane Austen
“A large income is the best recipe for happiness I ever heard of.”
Benjamin Graham
“The prime purpose of a business corporation is to pay dividends
to its owners.”
Image source: John D. Rockefeller: https://en.wikipedia.org/wiki/John_D._Rockefeller.
Benjamin Graham: https://en.wikipedia.org/wiki/Benjamin_Graham.
Jane Austen: https://writersinspire.org/writers/jane-austen.
34
Synchronised GDP growth
Revision of G10 growth forecasts over time
Consensus G10 real GDP growth forecasts (YoY %)
Source: Bloomberg consensus forecasts, as at 31 December 2017.
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4
2.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4
2.6
2011 2012 2013 2014 2015 2016 2017 2018
2012
2013
2014
2015
2016
2017
2018
35
Valuations and earnings growth
Earnings growth
From downgrades to upgrades
Source: Datastream, Bloomberg, IBES, as at January 2018.
*Japan EPS numbers refer to the fiscal year (ending March Y+1).
2017 EPS growth figures are forecasts.
Region 12m forward
valuations
EPS Growth
(%)
PE
(x)
DY
(%) 16 17F 18F
Japan* 15 1.9 12 14 30
Eurozone 14 3.5 4 10 9
US 19 2.2 2 11 13
UK 14 4.2 -2 22 7
EM 12 2.4 8 23 13
Global 16 2.6 3 15 10
MSCI World EPS growth forecasts (% YoY)
Source: Citi, as at February 2018.
-7%
-2%
3%
8%
13%
18%
2014 2015 2016 2017 2018
2015 2016
2017
2018
2019
36
0
10
20
30
40
50
60
70
80
90
100 Current payout (%)
Median payout (%) since 1970
Payout ratios by region
Source: Citi Research – Global Equity Strategy, as at 31 December 2017.
*Median shown since 1996.
CEEMEA: Central Eastern Europe Middle East & Africa; DM: Developed Markets.
Yields may vary and are not guaranteed. Forecasted figures are projected estimates based on Factset consensus data.
Pa
yo
ut ra
tio
(%
) The global equity income environment
Payout ratios are broadly in line with history
37
Janus Henderson Global Dividend Index
Long-term study of global dividend trends
• Analyses dividends paid by the world’s
top 1,200 firms by market capitalisation.
• Base year of 2009 and report based in
US$.
• Global dividends rose 7.7%* in 2017.
Global dividends (US$)
Source: Janus Henderson Investors, as at 19 February 2018.
Note: * Headline growth. Underlying growth was +6.8%.
Past performance is no guarantee of future results.
Bill
ions (
$)
730 779
948
1,025 1,059
1,173 1,153 1,154
1,252
1,348
-
200
400
600
800
1,000
1,200
1,400
1,600
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018e
38
The importance of dividends
Higher yielding stocks, with growing dividends, have outperformed
Source: Thomson Reuters and Datastream, as at 25 January 2018.
Note: Rebased to 100, as at 30 June 1995. Past performance is no guarantee of future results.
0
100
200
300
400
500
600
700
800
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
MSCI World Total Return Index
MSCI World High Dividend Yield Total Return Index
Performance of dividend yielders to broad market
+664%
+454%
Re
ba
se
d r
etu
rn
39
0
2
4
6
8
10
12
14
16
18
<1%
1%
-2%
2%
-3%
3%
-4%
4%
-5%
5%
-6%
6%
-7%
7%
-8%
8%
-9%
9%
-10
%
10
%-1
5%
15
%-2
0%
Forecast yield
Realised yield
Higher yield can be illusory
Avoid value traps
Source: Société Générale Cross Asset Research, as at 31 December 2017.
Note: Yield and forecasts relate to the period 1995 to 31 December 2017.
*Janus Henderson Global Equity Income team generally focus on, but is not limited to, stocks yielding 2% – 6%.
Estimated versus realised yield by dividend yield level
Realised yield lower
than market forecasts
Team’s focus yield range*
40
Distribution of global equity income
MSCI World by Dividend Yield
392
467
323
207
108
75 62
0
50
100
150
200
250
300
350
400
450
500
<1 % 1%-2% 2%-3% 3%-4% 4%-5% 5%-6% >6%
Source: Factset, as at 26 January 2018.
Nu
mb
er
of co
mp
an
ies
Dividend yield
41
Not everything has done well
Global value versus growth
75
80
85
90
95
100
105
80
85
90
95
100
105
110
2009 2010 2011 2012 2013 2014 2015 2016 2017
Value
outperforming
Value
underperforming
Source: Bloomberg, as at December 2017, MSCI World Value and Growth Indices.
Note: Rebased to 100, at 31 December 2009.
42
European financials have lagged
European banks and German bond yields
Source: Bloomberg, as of 31 December 2017.
Note: Stoxx 600 ex-UK Bank Index rebased to 100, 31 December 2017.
-0.4
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
60
70
80
90
100
110
120
Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17
Stoxx Europe Bank Sector (Index, LHS)
German 10yr government bond yield (%, RHS)
43
Energy: dividends attractive
“Our intent remains to offset any ongoing scrip dilution.”
“Achieving goals to cashflow neutrality at $40.”
“Future dividends will be settled entirely in cash.”
“Free cashflow increase at $50.”
“Maintaining discipline to continue to reduce breakeven.”
Source: Respective company websites.
Note: References made to individual securities should not constitute or form part of any offer or solicitation to issue, sell, subscribe or purchase the security.
44
Energy: dividends attractive
-15,000
5,000
25,000
45,000
65,000
85,000
105,000
125,000
Restructuring and return improvement
Source: Redburn, as at October 2017.
Note: *Free cash flow of 7 major oil companies.
Source: ISHN.com.
Org
an
ic fre
e c
ash
($
m)*
45
The more things change, the more they stay the same
• Macro backdrop supportive
• Higher yield doesn’t mean better yield
• Focus on cashflow and dividend growth
Passive aggressive:
Global Emerging Markets
Glen Finegan
Head of Global Emerging Market Equities
Ian Tabberer
Portfolio Manager,
Global Emerging Market Equities
47
Glen Finegan
Head of Global Emerging Market Equities
17 years’ experience
Nicholas Cowley
Portfolio Manager
20 years’ experience
Michael Cahoon
Portfolio Manager
7 years’ experience
Stephen Deane
Portfolio Manager
10 years’ experience
Ian Tabberer
Portfolio Manager
16 years’ experience
Janus Henderson Global Emerging Markets
Boutique culture – Edinburgh based
Source: Janus Henderson Investors, as at 31 December 2017.
• Average 14 years’ industry
experience.
• Leverage Global Equities
team.
• Long-term performance track
records based on a consistent
approach.
48
Emerging Markets demographics look attractive…
Most population growth will come from less developed regions
0
1
2
3
4
5
6
7
8
9
10
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Least developed regions
Less developed regions
More developed regions
Source: United Nations, Department of Economic and Social Affairs, Population Division (2017).
Note: World Population Prospects: The 2017 Revision, DVD Edition. Total Population, both sexes, using medium fertility. Definition for ‘More developed regions’ and ‘Less
developed regions’ can be found at https://esa.un.org/unpd/wpp/Download/Standard/Population/.
Population (billions)
49
…but not all EM countries offer the same opportunity
MSCI Emerging Markets regional breakdown
Source: Janus Henderson Investors and Datastream, as at 31 December 2017.
United Nations, Department of Economic and Social Affairs, Population Division (2017). World Population Prospects: The 2017 Revision, DVD Edition. Total
Population, both sexes, using medium fertility. Definition for ‘Less developed regions’ can be found at https://esa.un.org/unpd/wpp/Download/Standard/Population/
Regions as defined by Janus Henderson Investors. LatAm (Latin America) includes Caribbean. EM = Emerging Markets.
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
0%
10%
20%
30%
40%
50%
SE Asia(inc. South
Korea)
GreaterChina
LatAm Africa Middle East India EasternEurope (inc.
Russia)
■ MSCI EM Index weights (%) (LHS)
■ % of regional population to ‘Less developed regions’ population (LHS)
■ 10 year CAGR population % (2017-2027) (RHS)
50
0%
5%
10%
15%
20%
25%
30%
35%
Indices follow but don’t lead
MSCI Emerging Markets country breakdown in
■1992 ■2017
and 2017 1992
Source: MSCI, as at 31 December 1992 and 31 December 2017.
Note: Others includes: Colombia, Czech Republic, Egypt, Hungary, Pakistan, Peru, Poland, Qatar and UAE.
51
Who controls the index?
Exposure to State Owned Enterprises
73%
27%
Private SOE
Source: Janus Henderson Investors, MSCI, as at 31 December 2017.
Note: Private, SOE (State Owned Enterprises) as defined by Janus Henderson Investors.
MSCI EM Index
52
We back owners and entrepreneurs for the long-term
Greatview Aseptic
“Mobile and internet technology not only has
fundamentally changed our life…but also presents
historic opportunities to the PRC to surpass others…The
PRC dairy industry has tightly and closely connected to
the world’s stage…Traditional manufacturing sector must
embrace the new generation with innovation.
We, Greatview, have been pursuing innovation for new
business opportunities.”
First item level traceable milk
cartons using QR codes
Quote source: http://www.greatviewpack.com/info/list2288b7a1dc9042aeb2efd004b895df3f_2.html.
Image source: https://www.foodbev.com/news/best-new-brand-or-business-at-world-dairy-innovation-awards/.
Note: References made to individual securities should not constitute or form part of any offer or solicitation to issue, sell, subscribe or purchase the security.
Jeff Bi, Co-Founder, Chief Executive Officer and Executive Director
53
…that have strong track records and alignment
Source: 1 http://forbesindia.com/printcontent/20732. 2 https://www.forbes.com/profile/charlene-de-carvalho-heineken/gallery/3.
3 http://www.adityabirla.com/media/press-reports/its-now-or-never . 4 http://www.quinenco.cl/esp/directores.php.
Note: References made to individual securities should not constitute or form part of any offer or solicitation to issue, sell, subscribe or purchase the security.
Deepak Parekh1
Chairman of HDFC India’s leading housing
finance company
Seek and you shall find!
Kumar Mangalam Birla3
Chairman of Grasim
Industries, UltraTech
Cement, Idea Cellular and
Aditya Birla Capital
Charlene de Carvalho-
Heineken2
Executive Director of
Heineken Holdings
Jean-Paul Luksic4
Chairman of Antofagasta
and Vice Chairman of
Quinenco Chilean business family with
interests across the economy
54
Positioning: regions and countries
Janus Henderson Global Emerging Markets Equity Fund
0
5
10
15
20
25
30
35 FundBenchmark
Regional exposure Country exposure %
Source: Janus Henderson Investors, as at 31 December 2017.
Benchmark: MSCI Emerging Markets Index (net dividends reinvested) in AUD.
Note: MSCI country classifications standard used to determine country classifications.
The above is for illustrative purposes only and should not be misconstrued as advice.
Americas, 24%
Asia Pacific, 42%
EMEA,
26%
Cash, 7%
55
Not all emerging markets are “Emerging”
• The Janus Henderson Global Emerging Markets Equities
strategy is bottom-up and benchmark unaware.
− The Benchmark gives an illusion of safety.
− 50% of the Benchmark is Greater China and South
Korea.
Large parts of the world are still developing markets.
The long-term Global Emerging Markets opportunity
remains UNCHANGED.
Benchmark: MSCI Emerging Markets Index (net dividends reinvested) in AUD.
THANK YOU
57
Contact us
• Visit www.janushenderson.com/australia
Matt Gaden
Head of Distribution, Australia
Jordan Tang
Head of Retail Distribution
Gary Horton
Institutional Sales Director
Amy Barron
Retail Sales Director (NSW)
Harry Wall
Head of Client Account Management
Tom Kelly
Retail Sales Director (QLD)
Charles Horan
Senior Client Account Manager
David Livera
Retail Sales Director (VIC/WA/TAS)
Fawzul Ahmed
Client Account Manager
John Negri
Retail Sales Director (VIC/SA)
Mark Fensom
Client Account Manager
Daniel Simpson
Business Development Associate