Transcript Template based on NEW palette of Dynamic Funds

GLOBAL
INVESTING
IS IT TIME TO RELOCATE
SOME OF YOUR PORTFOLIO?
Name
Title
Company
DATE
AGENDA
1.
THE BACKYARD BIAS
2.
HAVING A GLOBAL PERSPECTIVE
3.
GLOBAL GROWTH OPPORTUNITIES
THE
BACKYARD
BIAS
CANADIANS HAVE A BACKYARD BIAS
CANADIANS HAVE THE MAJORITY OF THEIR ASSETS INVESTED IN CANADA
Outside
Canada
38%
Canada
62%
Source: IFIC mutual fund assets, as of June 30, 2011.
Includes Equity, Balanced and Fixed Income Mutual Fund Assets.
YOU CAN’T BLAME THEM
CANADA HAS OUTPERFORMED THE WORLD MARKET OVER THE PAST 10 YEARS
200
180
Canada
160
140
120
100
World
80
60
40
20
0
Jan-02 Oct-02 Jul-03 Apr-04 Jan-05 Oct-05 Jul-06 Apr-07 Jan-08 Oct-08 Jul-09 Apr-10 Jan-11 Oct-11 Jul-12
Source: Morningstar, Canada as represented by the c, World as represented by MSCI World Index in Canadian Dollars.
January 1st, 2002 to December 31 2012. The chart above is for illustrative purposes only.
CANADA’S STRONG PERFORMANCE
CONCENTRATION IN 3 SECTORS HAS HELPED PERFORMANCE OVER THE PAST 10 YEARS
Utilities
Telecom. Services
Information Technology
Health Care
Consumer Staples
Consumer Discretionary
Industrials
Financials
Materials
3 SECTORS:
• 76% of Canadian
market
Energy
-10% 0% 10% 20% 30% 40%
Source: Morningstar, as of December 31st, 2012.
CANADA’S STRONG PERFORMANCE
RISE IN DOLLAR HAS MIRRORED RISE IN MARKET
1.2
16000
14000
1
Canadian Dollar
12000
0.8
10000
0.6
8000
S&P/TSX
6000
0.4
4000
0.2
2000
0
12/31/2002 12/12/2003 11/26/2004 11/10/2005 11/21/2006 11/14/2007 10/28/2008 10/13/2009 9/27/2010
Source: Yahoo Finance. Bank of Canada
December 31, 2002 to February 27, 2013
0
9/12/2011
8/27/2012
PEFORMANCE FACTORS CHANGE
CANADIAN CONCENTRATION IN 3 SECTORS HAS HURT PERFORMANCE.
2012 Return: 13.4%
2012 Return: 4.16%
Utilities
Telecom. Services
4 SECTORS:
• 9% of Canadian
market
• 43% of U.S.
market
• Positive
performance YTD
Information Technology
Health Care
Consumer Staples
Consumer Discretionary
Industrials
3 SECTORS:
• 76% of Canadian
market
• Negative
performance YTD
Financials
Materials
Energy
-10% 0% 10% 20% 30% 40%
Sector Weight
Source: Morningstar, as of December 31st, 2012
-20%
-10%
Sector Performance
0%
10%
20%
PEFORMANCE FACTORS CHANGE
CANADIAN DOLLAR HAS STABILIZED
1.2
1.0
0.8
0.6
0.4
0.2
0.0
Jan-10
Jul-10
Jan-11
Source: Bank of Canada as of January 4th, 2010 to March 1st, 2013 .
Jul-11
Jan-12
Jul-12
Jan-13
LONG TERM TREND
HISTORICALLY CANADIAN OUTPEFORMANCE LED TO LONGER LARGER GLOBAL
OUTPERFORMANCE
15%
CANADA OUTPERFORMS
10%
5%
0%
-5%
-10%
-15%
WORLD OUTPERFORMS
-20%
1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Difference between S&P/TSX Total Return Index and MSCI World Index ($Cdn) rolling 5 year periods, as of November 30, 2011
Source: Morningstar, S&P/TSX Total Return Index and MSCI World Index ($Cdn).
The S&P / TSX Total Return Index and MSCI World Index is unmanaged and unavailable for direct investment.
Assumes reinvestment of capital gains and dividends and no taxes. Index past performance is not indicative of future results.
For illustrative purposes only.
HAVING
A GLOBAL
PERSPECTIVE
TALE OF TWO WORLDS
WORLD BASED ON GEOGRAPHIC SIZE
WORLD BASED ON ECONOMIC SIZE
Source: As of 2008, CIA Factbook for GDP data.
Economic size based on GDP Growth Rate. Natural Earth website for shapefiles of the world.
CANADA’S SMALL GLOBAL FOOTPRINT
SMALL PERCENTAGE OF THE WORLDS LARGEST AND MOST RECOGNIZABLE COMPANIES
BASED ON THE FORTUNE GLOBAL 500 LIST ARE IN CANADA
CANADA
2%
REST OF
THE WORLD
Source: Fortune Global 500, 2012.
SMALL GLOBAL FOOTPRINT
6 LARGEST COMPANIES IN THE WORLD ARE LARGER THAN THE ENTIRE
CANADIAN MARKET
MARKET CAPITALIZATION IN 000’S
$2,700,000
$2,400,000
$2,100,000
$1,800,000
$1,500,000
$1,200,000
$900,000
$600,000
$300,000
$0
6 Largest Companies
Source: Moringstar, Financial Times Global 500
Canadian Market Cap as of December 31st, 2012, Company’s market cap as of December 31st, 2012.
Canada
GLOBAL
GROWTH
OPPORTUNITIES
DIVERSIFY BY GEOGRAPHY
THE BEST PERFORMING COUNTRIES CHANGE FROM YEAR TO YEAR
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
c
c
Source: Paltrack, Dynamic Funds. All Indices are represented in Canadian dollars
Mexico – BMV IPC. U.S. – S&P 500 Total Return. England – FTSE 100 Total Return. Canada – S&P/TSX Total Return.
Germany – FSE DAX Total Return. Brazil – BOVESPA. France - Euronext Paris CAC 40 PR. Japan – Nikkei 225
Average PR. Hong Kong – Hang Seng Hong Kong Composite.
2012
CPP HAS GONE GLOBAL
CANADIAN PENSION PLAN INVESTS THE MAJORITY OF THEIR EQUITY PORTFOLIO
OUTSIDE OF CANADA
Canadian Equities
Foreign Developed
Markets
Source: Canadian Pension Plan Annual Report, as of March 31, 2012.
Emerging Markets
U.S. CORPORATE REVENUE IS DIVERSIFIED
U.S. COMPANIES EARN A SIGNIFICANT AMOUNT OF REVENUE OUTSIDE THE U.S.
Outside
U.S.
Source: RBC Economics, % of revenue of S&P 500 Companies.
In the
U.S.
AND CORPORATE PROFITS ARE GROWING
U.S. CORPORATE PROFITS
2,500
2,000
In billions
1,500
1,000
500
0
2007q1 2007q3 2008q1 2008q3 2009q1 2009q3 2010q1 2010q3 2011q1 2011q3 2012q1 2012q3
Source: U.S. Department of Commerce, Bureau of Economic Analysis.
HOWEVER U.S. STOCKS REMAIN CHEAP
PRICE TO EARNINGS LEVELS OF THE S&P 500
30
25
20
15
10
5
0
1999
2000
2001
2002
2003
2004
Source: Morningstar, November 30th 1999 to December 31st,2012.
2005
2006
2007
2008
2009
2010
2011
2012
OPPORTUNITY IN EMERGING MARKETS
THE RISE OF THE DOMESTIC CONSUMER
NUMBER OF HOUSEHOLDS IN CHINA WITH DISPOSABLE INCOME ABOVE $10,000 U.S.
MILLIONS
250
200
150
100
50
0
2010
Source: Euromonitor International “Top 10 largest economies in 2020” July 7, 2010
2020
OPPORTUNITY IN EMERGING MARKETS
INDIA AND CHINA PURCHASED 2.35x MORE PASSENGER VEHICLES
THAN THE U.S. IN 2012
MILLIONS
25
20
15
10
5
0
U.S.
India and China
Source: US Bureau of Economic Analyses, China Auto Review, Society of Indian Automobile Manufacturers
OPPORTUNITY IN EMERGING MARKETS
CHINA WILL BUILD ENOUGH SKYSCRAPERS TO
FILL 10 NEW YORK-SIZED CITIES BY 2025
Sources: McKinsey & Co. report "Preparing for China's urban billion" March 2009
EMERGING MARKETS SET TO DRIVE ECONOMIC
GROWTH
FORECASTED GDP GROWTH
Advanced
Economies
Brazil, Russia,
China, India
World Total
0.0
1.5
2013-2018
3.0
2019-2025
Source: The Conference Board Global Economic Outlook 2013, January 2013 update
4.5
YOU’RE ALREADY A GLOBAL INVESTOR
Kitchen
Computers
Wireless Phone
Entertainment
Automobile
Electrolux
Lenovo
Iphone
Samsung
GM
Frigidaire
HP
Blackberry
Panasonic
Chrysler
Whirlpool
Apple
Samsung
LG
Ford
Maytag
Dell
Nokia
Sony
BMW
Kitchenaid
Acer
HTC
Sharp
Mercedes
Jenn-Air
Gateway
Motorola
Bose
Nissan
Bosch
eMachines
Yamaha
Toyota
Toshiba
Honda
Siemens
Miele
Mazda
Hyundai/Kia
Volkswagen
Mitsubishi
Fiat
Volvo
IMPORTANT INFORMATION
Commissions, trailing commissions, management fees and expenses all may be associated with mutual
fund investments. Please read the prospectus before investing. The indicated rates of return are the
historical annual compounded total returns including changes in units value and reinvestment of all
distributions and do not take into account sales, redemption, distribution or optional charges or income
taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed,
their values change frequently and past performance may not be repeated
Views expressed regarding a particular company, security, industry or market sector should not be
considered an indication of trading intent of any funds managed by Goodman & Company, Investment
Counsel Ltd. These views are not to be considered as investment advice nor should they be considered a
recommendation to buy or sell.
This document is not to be distributed or reproduced without the consent of Goodman & Company,
Investment Counsel. Dynamic Funds is a division of Goodman & Company, Investment Counsel Ltd.