Arrowstreet Global Equity
Quarterly Investment Option Update
31-December-2016
Availability
international assets is not hedged back to Australian dollars.
This means that investors will also be exposed to currency risk
because of movements in exchange rates. Note: The
investment option’s exposure to derivatives is not reflected in
these ranges.
Product name
APIR
AMP Flexible Super – Choice (Retirement)
AMP1590AU
AMP Flexible Super – Choice (Super)
AMP1578AU
CustomSuper
AMP1530AU
Flexible Lifetime – Allocated Pension
AMP1542AU
Investment category: Global shares
Flexible Lifetime – Super
AMP1530AU
Suggested Investment Timeframe: 7+ years
SignatureSuper
AMP1554AU
Standard Risk Measure: 6/ High
SignatureSuper – Allocated Pension
AMP1566AU
Investment style: Core
Investment Option Performance
Investment performances are subject to product fees and
where relevant tax as outlined in the product PDS. Therefore
investment performance may differ between products. In
addition, activity on your account such as contributions and
deductions will also impact the investment performance specific
to you. To view the latest investment performances for each
product, please visit www.amp.com.au. You can also view the
last investment performance specific to you by visiting your My
Portfolio account.
Asset Allocation
Benchmark (%)
Actual (%)
Global Equities
100%
99.25%
Cash
0%
0.75%
Holdings
Industry Exposure
%
Consumer Discretionary
10.26%
Consumer Staples
9.94%
Energy
8.93%
Contact Us
Financials
15.24%
Web: www.amp.com.au
Health Care
4.08%
Email: [email protected]
Industrials
13.99%
Information Technology
19.78%
Materials
13.32%
Real Estate
0.05%
Telecommunication Services
2.45%
Utilities
1.22%
Phone: 131 267 (Mon. to Fri 8:30am to 6:00pm AEST)
Overview
Aim & Strategy: To seek to achieve a long term (at least 7
years) total return before fees and expenses that exceeds the
MSCI All Country World Index ex-Australia, in Australian dollars
unhedged with net dividends reinvested. The portfolio invests
primarily in shares of companies listed on stock exchanges
around the world, but will also have some exposure to cash and
derivatives. The portfolio will use derivatives such as foreign
exchange contracts to facilitate settlement of stock purchases
and to take active currency positions. Derivatives will not be
used for leverage or gearing purposes. Exposure to
AMP Life Limited
ABN 84 079 300 379
Regional Exposure
%
Asia Ex Japan
1.16%
Europe Ex Uk
13.82%
Japan
11.07%
North America
48.60%
United Kingdom
11.37%
Emerging Markets
13.22%
Globally, an OPEC oil production agreement finalized at the
end of November exceeded expectations by securing the
intended cooperation of non-OPEC producers. The production
outlook boosted oil producers as WTI crude finished at $54,
near the highs for the year. The rebound of oil and commodity
prices benefited energy and materials sectors globally; in
emerging markets these were the only two sectors to post
positive U.S. dollar returns in the fourth quarter.
Attribution Summary
Top Ten Securities
%
Philip Morris International
1.53%
Taiwan Semicon Man
1.42%
Altria Group Inc
1.38%
Intel Corp
1.35%
Samsung Electronic
1.31%
Nvidia Corp
1.29%
Facebook Inc
1.29%
At&T Inc
1.05%
Bp
0.98%
Marsh & Mclennan Cos
0.85%
Investment Option Commentary
The Arrowstreet Global Equity Fund returned 7.22% after fees
for the December quarter, outperforming the MSCI All
Countries ex Australia Index by 0.27.
Equity market performance was mixed in the fourth quarter,
with the strongest performance from North America and the
weakest from emerging markets. The U.S. equity market rallied
after November 8, as bullishness around the potential for tax
reform, stimulus spending on infrastructure and fewer
regulatory burdens under President-elect Trump outweighed
concerns regarding his lack of policy details. Greater
confidence in the growth of the U.S. economy underpinned the
U.S. Federal Reserve decision to raise rates in December,
providing a further boost to both equities and to the U.S. dollar.
Concerns about the impact of the stronger currency on U.S.
exporters remained muted. European and U.K. manufacturers
posted strong numbers in December, in part benefiting from
relatively weak currencies. The financial sector also rebounded
in the fourth quarter, driven by market expectations of improved
profitability from a steeper yield curve and stronger global
growth.
In contrast, emerging markets reacted negatively to the
strengthening U.S. rate environment, both due to the impact on
holders of U.S. denominated debt and concerns regarding the
relative attractiveness of the region for global capital flows.
Capital flows were a particular concern for China as the yuan
continued to devalue over the quarter. The government
attempted to mitigate the impact of the strengthening U.S.
dollar by announcing an adjustment to its weight in the currency
basket used to manage the yuan's value and adding new
currencies to the basket calculation.
AMP Life Limited
ABN 84 079 300 379
United States Health Care
Performance in the U.S. health care sector was mixed during
the
quarter,
with
areas
including
pharmaceuticals,
biotechnology and health care equipment posting negative
returns. For example, drug distributors came under pressure
after McKesson announced on their earnings call in October
that there was an ongoing price war in the sector. Health care
providers were the exception, surging during the quarter after
the surprise outcome of the U.S. presidential election raised the
probability of the Affordable Care Act being repealed. Our
underweight positioning was motivated by basket level indirect
momentum signals and catalyst signals.
United Kingdom Consumer Staples
After the U.K. voted to leave the E.U. in June, the decline of the
British pound forced many consumer staples conglomerates to
raise prices to compensate for the higher cost of imported
goods. A spat between Tesco and Unilever over a proposed
10% price increase for Unilever's iconic Marmite highlighted the
need for producers to either raise prices or see a hit to profits.
In total, the Consumer Price Index in the U.K. increased each
month during the quarter and ended November up 1.2% yearover-year as companies adjusted to accommodate their higher
input costs. Our overweight positioning was motivated by
basket level momentum signals and catalyst signals.
Stock Commentary
NVIDIA Corp (United States Information Technology)
U.S. technology company NVIDIA saw its strongest quarter in
over ten years on the back of a stellar third quarter earnings
report highlighting record levels of revenue, margins and
earnings. Results were driven by strong growth in its core
gaming and data center businesses. Shares also rose with
market excitement about potential growth from driverless car
and virtual reality related applications. Our overweight
positioning was motivated by stock level momentum signals
and stock level quality signals.
Edwards Lifesciences Corp (United States Health Care)
Medical devices manufacturer Edwards Lifesciences plunged
after announcing third quarter earnings in late October. Sales
for the prior quarter missed analyst estimates for the first time in
more than two years, despite stronger than expected revenue
growth from the company's newly FDA approved trans-catheter
replacement heart valve. The company's disappointing top line
revenue, in spite of the new product launch, hinted at a
deterioration in sales for the company's core products. Our
overweight position was motivated by stock level price
momentum and quality signals.
What you need to know
This publication has been prepared by AMP Life Limited ABN 84 079 300 379,
AFSL No. 233671 (AMP Life). The information contained in this publication has
been derived from sources believe to accurate and reliable as at the date of this
document. Information provided in this investment option update are views of the
underlying Investment Manager only and not necessarily the views of the AMP
Group. No representation is given in relation to the accuracy or completeness of
any statement contained in it. Whilst care has been taken in the preparation of this
publication, to the extent permitted by law, no liability is accepted for any loss or
damage as a result of reliance on this information. AMP Life is part of the AMP
Group. In providing the general advice, AMP Life and AMP Group receives fees
and charges and their employees and directors receive salaries, bonuses and
other benefits.
The information in this document is of a general nature only and does not take
into account your financial situation, objectives and needs. Before you make any
investment decision based on the information contained in this document you
should consider how it applies to your personal objectives, financial situation and
needs, or speak to a financial planner.
The investment option referred to in this publication is available through products
issued by AMP Superannuation Limited ABN 31 008 414 104, AFSL No. 233060
(ASL) and/or AMP Life. Before deciding to invest or make a decision about the
investment options, you should read the current Product Disclosure Statement for
the relevant product, available from ASL, AMP Life or your financial planner.
Any references to the “Fund”, strategies, asset allocations or exposures are
references to the underlying managed fund that the investment option either
directly or indirectly invests in (underlying fund). The investment option’s aim and
strategy mirrors the objective and investment approach of the underlying fund. An
investment in the investment option is not a direct investment in the underlying
fund.
Neither AMP Life, ASL, any other company in the AMP Group nor underlying fund
manager guarantees the repayment of capital or the performance of any product
or particular rate of return referred to in this document. Past performance is not a
reliable indicator of future performance.
AMP Life Limited
ABN 84 079 300 379