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    Global Investing: Is It Time To Relocate Some of Your Portfolio?

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    The document discusses the benefits of global diversification for investors. It notes that most Canadian investors are concentrated in domestic markets, but that global markets offer greater opportunities for growth. International markets have outperformed Canada over the long term, and a globally diversified portfolio allows investors to take advantage of economic growth worldwide. The document recommends that investors allocate a portion of their portfolio to international markets such as emerging economies in order to benefit from global growth opportunities.

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    Global Investing: Is It Time To Relocate Some of Your Portfolio?

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    jigarcshah
    40 views27 pages
    The document discusses the benefits of global diversification for investors. It notes that most Canadian investors are concentrated in domestic markets, but that global markets offer greater opportunities for growth. International markets have outperformed Canada over the long term, and a globally diversified portfolio allows investors to take advantage of economic growth worldwide. The document recommends that investors allocate a portion of their portfolio to international markets such as emerging economies in order to benefit from global growth opportunities.

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    Presentation on Global Investing structures and offshore structures.

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    Global Investing

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    The document discusses the benefits of global diversification for investors. It notes that most Canadian investors are concentrated in domestic markets, but that global markets offer greater opportunities for growth. International markets have outperformed Canada over the long term, and a globally diversified portfolio allows investors to take advantage of economic growth worldwide. The document recommends that investors allocate a portion of their portfolio to international markets such as emerging economies in order to benefit from global growth opportunities.

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    40 views27 pages

    Global Investing: Is It Time To Relocate Some of Your Portfolio?

    Uploaded by

    jigarcshah
    The document discusses the benefits of global diversification for investors. It notes that most Canadian investors are concentrated in domestic markets, but that global markets offer greater opportunities for growth. International markets have outperformed Canada over the long term, and a globally diversified portfolio allows investors to take advantage of economic growth worldwide. The document recommends that investors allocate a portion of their portfolio to international markets such as emerging economies in order to benefit from global growth opportunities.

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    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 CANT BLAME THEM


    CANADA HAS OUTPERFORMED THE WORLD MARKET OVER THE PAST 10 YEARS
    200 180 160 140 120 100 80 60 40 20 0 Jan00

    Canada

    World

    Oct00

    Jul01

    Apr02

    Jan03

    Oct03

    Jul04

    Apr05

    Jan06

    Oct06

    Jul07

    Apr08

    Jan09

    Oct09

    Jul10

    Apr11

    Source: Morningstar, Canada as represented by the S&P/TSX Total Return Index, World as represented by MSCI World Index in Canadian Dollars. January 3rd, 200 to December 1, 2011. The chart above is for illustrative purposes only.

    CANADAS 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 Energy
    -20% -10% 0% 10% 20% 30% 40%

    3 SECTORS: 78% of Canadian market

    Source: Morningstar, as of November 30th, 2011.

    CANADAS STRONG PERFORMANCE


    RISE IN DOLLAR HAS MIRRORED RISE IN MARKET
    1.2 16000

    14000 1

    Canadian Dollar
    0.8

    12000

    10000

    0.6

    8000

    S&P/TSX
    0.4

    6000

    4000 0.2 2000

    0 12/31/2001 12/12/2002 11/27/2003 11/10/2004 10/26/2005 10/31/2006 10/26/2007 10/10/2008

    0 9/25/2009 9/10/2010 8/25/2011

    Source: Yahoo Finance. Bank of Canada December 31, 2001 to December 23, 2011

    PEFORMANCE FACTORS CHANGE


    CANADIAN CONCENTRATION IN 3 SECTORS HAS HURT PERFORMANCE. YTD: -6.9%
    Utilities Telecom. Services Information Technology
    4 SECTORS: 9% of Canadian market 43% of U.S. market Positive performance YTD

    YTD: +1%

    Health Care
    Consumer Staples Consumer Discretionary Industrials

    Financials
    Materials Energy -60% -40% -20% 0%

    3 SECTORS: 78% of Canadian market Negative performance YTD

    20% 40%

    -60%

    -40%

    -20%

    0%

    20%

    40%

    Sector Weight
    Source: Morningstar, as of November 23rd, 2011.

    Sector Performance

    PEFORMANCE FACTORS CHANGE


    CANADIAN DOLLAR HAS STABILIZED
    1.2

    1.0

    0.8

    0.6

    0.4

    0.2

    0.0 Jan- Feb- Mar- Apr- May- Jun- Jul- Sep- Oct- Nov- Dec- Jan- Feb- Mar- May- Jun- Jul- Aug- Sep- Oct- Nov10 10 10 10 10 10 10 10 10 10 10 11 11 11 11 11 11 11 11 11 11
    Source: Bank of Canada as of January 4th, 2010 to December 1st, 2011.

    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.

    CANADAS 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, 2011.

    SMALL GLOBAL FOOTPRINT


    6 LARGEST COMPANIES IN THE WORLD ARE LARGER THAN THE ENTIRE CANADIAN MARKET
    MARKET CAPITALIZATION IN 000S
    $1,800,000 $1,600,000 $1,400,000

    $1,200,000
    $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 6 Largest Companies
    Source: Morningstar, Financial Times Global 500. Canadas market cap as of Nov 30, 2011. Companies market caps are as of Oct 31, 2011.

    Canada

    GLOBAL GROWTH OPPORTUNITIES

    IMPORTANCE OF GLOBAL DIVERSIFICATION


    THE BEST PERFORMING COUNTRIES CHANGE FROM YEAR TO YEAR
    2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

    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.

    CPP HAS GONE GLOBAL


    CANADIAN PENSION PLAN INVESTS THE MAJORITY OF THEIR EQUITY PORTFOLIO OUTSIDE OF CANADA
    Emerging Markets

    Canadian Equities

    Foreign Developed Markets

    Source: Canadian Pension Plan Annual Report, as of March 31, 2011.

    U.S. CORPORATE REVENUE IS DIVERSIFIED


    U.S. COMPANIES EARN A SIGNIFICANT AMOUNT OF REVENUE OUTSIDE THE U.S.

    Outside U.S.

    In the U.S.

    Source: RBC Economics, % of revenue of S&P 500 Companies.

    AND GROWING
    U.S. CORPORATE PROFITS
    2,000

    1,500

    In billions

    1,000

    500

    0 2007q1 2007q3 2008q1 2008q3 2009q1 2009q3 2010q1 2010q3 2011q1 2011q3

    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

    0 1999

    2000

    2001

    2002

    2003

    2004

    2005

    2006

    2007

    2008

    2009

    2010

    Source: Morningstar, November 30th 1999 to October 31st 2011.

    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 2020

    Source: Euromonitor International Top 10 largest economies in 2020 July 7, 2010

    OPPORTUNITY IN EMERGING MARKETS


    INDIA AND CHINA PURCHASED 70% MORE PASSENGER VEHICLES THAN THE U.S. IN 2010
    MILLIONS

    25 20 15 10 5 0 U.S.
    Source: Time Mag. Your Next Job: Made in India or China March 17, 2011

    India and China

    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


    2012 FORECASTED GDP GROWTH
    9

    0 World Advanced Economies Brazil, Russia, India, China

    Source: Goldman Sachs Global ECS Research, Dec. 2010

    YOURE ALREADY A GLOBAL INVESTOR


    Kitchen
    Electrolux Frigidaire Whirlpool Maytag Kitchenaid Jenn-Air Bosch Siemens Miele

    Computers
    Lenovo HP Apple Dell

    Wireless Phone
    Iphone Blackberry Samsung Nokia

    Entertainment
    Samsung Panasonic LG Sony Sharp Bose Yamaha Toshiba

    Automobile
    GM Chrysler Ford BMW

    Acer
    Gateway eMachines

    HTC
    Motorola

    Mercedes
    Nissan Toyota

    Honda
    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.

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