Liontamer goes shopping for quality
Liontamer has just launched its new GLOBAL Series 2 fund which puts 10 of the best-known global brands in a single investment basket. The manager explains why this is no off-the-shelf solution.
Wednesday, July 12th 2006, 7:03AM
Liontamer has just launched its new GLOBAL Series 2 fund which puts 10 of the best-known global brands in a single investment basket. The manager explains why this is no off-the-shelf solution.
‘Gillette’,
it’s a name synonymous with shaving equipment.
‘Pantene’ and ‘Head & Shoulders’ stand out in everyone’s mind as
shampoo brands. ‘Iams’
and ‘Eukanuba’ are the posh and pricey pet foods you
get from your vet.
All are very distinctive brands in their own right and
they’re all owned by Proctor & Gamble, the number one producer of household
products in the world. It also owns
‘Pringles’ (the chips in the canisters), Wella (the
TV jingle “you can tell a Wella woman” might pop to
mind), Duracell, Oral-B, Pampers, Tide, Ariel, Vicks and Olay.
Proctor & Gamble have 17 ‘billion-dollar’ brands
in its stable.
It is just one example of a company from the ‘Global
Brands Index’ put together by Liontamer for the
latest capital protected fund launch. GLOBAL Series 2 offers a choice of 100%
capital protection or 90% (less any entry fee) as well as currency protection.
With ‘booster’ and ‘super-booster’ units, investors’ returns will accelerate
those of the index.
|
Liontamer Global Brands Index |
|
|
Canon ( |
PepsiCo ( |
|
Citigroup ( |
Proctor & Gamble (U.S) |
|
DaimlerChrysler ( |
SAP ( |
|
L’Oréal
( |
Siemens ( |
|
Nestlé ( |
|
While this is a concentrated portfolio of 10 shares,
you could almost say that each is operating like a small country.
Take the Proctor & Gamble example again. With a market
capitalisation of NZ$292 billion, it’s more than four times the size of the
entire NZ Stock Exchange. Even L’Oreal, the smallest company in the index at
NZ$93 billion, is one third bigger than all of NZ’s
locally listed shares.
|
Market
capitalisation |
|
|
Liontamer
Global Brands Index |
$NZ 1,820 billion |
|
Australian Stock Exchange |
$NZ 1,420 billion |
|
NZ Stock Exchange
|
$NZ 68
billion |
Source of
market cap figures: ASX (May 2006), NZX, Bloomberg and
exchange
rates from ANZ (June 2006).
From pantry
to portfolio
When your clients look at a portfolio of shares, do
they usually have an inherent understanding of each company’s products? Can they easily see the broad macro picture
the fund manager is trying to exploit?
In many cases the answer would be ‘no’.
GLOBAL Series 2 is a thematic brand based portfolio
full of names we can all relate to – such as 7-UP and Starbucks from the
PepsiCo family or Mercedes-Benz and Jeep from DaimlerChrysler.
But brand alone doesn’t make a stock ‘a good pick’. To
make the transition from ‘pantry to portfolio’, the research methodology needs
to take in both the macro picture and the micro stock-specific analysis.
At a macro
level, the markets have taken some hard knocks during May
and June. Shopping for shares is now a
lot cheaper, which could give this fund a timing boost. The bourses have been
spooked by rising interest rates and inflation fears. The risks are evident,
but let’s not forget they always have been.
While reporting on the recent market sell-off, the
Australian Financial Review said: “Once
led precariously by US consumers and Chinese producers alone, global growth has
recently broadened to encompass recoveries in the Japanese and European
economies. Other emerging market economies from
The global brands theme is deeply routed in the source
of future global growth. Wealth and consumer demand are growing across these
huge emerging regions. Companies with well-known brands have the power to team
up with locals in joint ventures, acquire brands and design for local tastes.
Their brands have an aspirational quality and inspire
both trust and status.
We believe they’re well placed to benefit from this
structural shift in global growth.
At a micro
level, companies have been identified with positive share
price outlooks as well as strong brand propositions. Two research houses have
been tapped into.
The first is a large European fund manager, ‘KBC Asset
Management’.
Second, we’ve used company outlooks from global
investment bank ‘UBS’.
That combination has been overlaid with industry and
geographical spreads to form the final basket.
GLOBAL Series 2 Investment Statements and fact sheets can be
obtained by calling Matthew Mimms on: 0800
210 450 or emailing adviser_relations@liontamer.com Special Offers
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