A Glo lobal l Equit ity y Str trategy egy focu cuse sed on se secu cular lar and disrupti ptive e trends relat ated ed to Environmental Sustainability & Resource Efficiency August st 2018
Agricultural Industrial Digital Sustainability Revolution Revolution Revolution Revolution 2
The industrialization of technology is accelerating, disrupting conventional practices • Renewable energy • Energy efficiency • Industrial efficiency • Automation • Collaborative robotics • Electric vehicles Industrial Revolution • Autonomous driving • Precision agriculture • Water treatment Digital Revolution • …. Sustainability Revolution 3 Source: W. Michael Cox, Southern Methodist University, O’Neil Center for Global Markets Annual Report 2015 -16, Nanuk extrapolation post 2015
Multiple influences are driving the transition to more sustainable technologies, products and services Governm ernmen ent Policy Populat ation on Growth h & New Demog ograp aphics Techn hnol olog ogies Adv Advan anced ed Econ onomic c Manuf ufact actur uring ng Devel elop opme ment Sust Su stain ainable able Technolo logie gies Falling ng Environ onme mental al & Growth, wth, Techn hnol olog ogy y Res esou ource e Comple plexit ity, , Cos osts Constrai aints Inef effic icienc iency, Disru ruption ption 4
Solar is now the cheapest st source of 3D printi ting ng of metal l parts s is already y in Off ffshor shore wind power is now as cheap new electric icit ity y supply ly globally lly comme mercia ial l use as new w coal l fired power Mass ss market t electr tric ic vehic icles les are Drones nes are approved oved for comme mercia ial l 24hr electr tric icit ity y from m solar and batteries ies use availabl ilable today is now w competit itive ive with h grid power Roboti tic Medical l Equip ipment nt Autonomo nomous us cars s are drivin ving on our Collabor llaborati tive ve robots ts are already y cheaper roads s today y (and availabl ilable for hire) than develop loped countr try y labou our costs ts 5
Industrial Design Software Carbon Fibre Wind Farms Wind Turbines Solar PV Equipment & Projects Industrial & Auto Semiconductors Waste Management High Speed Rail Automotive ADAS Metal 3D Printing Batteries & Environmental Products Aquaculture Connectors EV & ADAS Components Lithium Battery Chemicals Residential Solar Leasing Biomaterials Clean Energy Buses Commercial Drones Energy Efficiency Project Financing Energy Infrastructure & Automation 6 Collaborative Robots Composite Materials & Moulds Industrial Batteries
Sector allocations access a broad range of environmental sustainability-related trends Se Sector Fund Weigh ght Selected Areas Se as Of Investm tmen ent LED lighting, OLED, building energy efficiency, auto energy efficiency, electrical energy efficiency, vehicle Energy Efficiency 25% electrification (EVs) Solar, wind, hydro, fuel cells, transmission and distribution, smart metering, energy storage Clean Energy 20% (batteries), biofuels, demand response Factory automation, robotics, ‘internet of things’, commercial drones, 3D printing, advanced Industrial Efficiency 22% manufacturing Waste management, waste to energy, recycling, Waste & Pollution 10% pollution control Agricultural equipment, fertilizers, chemicals, food Food & Agriculture 8% processing, forestry and forest products Sustainable materials, advanced materials, Advanced Materials 9% lightweight materials Desalination, water efficiency, waste water Water 2% processing, water supply, infrastructure Wearable devices, diagnostic technology, healthcare Healthcare Technology 3% solutions, data analytics 7 Source: Nanuk, as at 30 June 2018
• Environmental challenges and resource constraints necessitate significant longer term transitions in the global economy • Medium term outperformance of environmental equities is already evident 450 Index Return (AUD, 31 Jul 2018) 1 Yr 15 Yrs 400 FTSE EOAS 13.1% 10.9% MSCI ACWI 15.0% 7.5% 350 Outperformance -1.9% 3.4% 300 250 200 150 100 50 MSCI All Country World Total Return Index (AUD) FTSE Environmental Opportunities All-Share Total Return Index (AUD) NANUK New World Strategy (AUD) 0 Sources: Nanuk, Bloomberg, FTSE Russell, $A, annualised returns. The Nanuk “Strategy” performance constitutes the following: (1) Nanuk New World Fund since launch on 2 Nov 2015 , and (2) gross / pre-fee performance of the long book of the Nanuk Global Alpha Fund less an annualized expense ratio of 2.9% (from 31 Jul 2012 to 1 Nov 8 2015) . NB: Past performance is not an indicator of future performance.
Robust fund outperformance since inception Since e 1 1 mt mth 6 mt 6 mth 1 1 yr yr Fund Performa mance 2 2 yr yr Inceptio ption (to 31 Jul 2018) (%pa pa) (%pa pa) New World Fund Retu eturn n (%) %) 2.8 7.6 23.3 3 20.5 5 16.2 .2 MSCI ACWI Return (%) 2.4 5.8 19.2 15.2 9.3 0.4 .4 1.9 9 4.2 5.3 3 6.9 Value e Add Added (%) 9 Note: NNWF inception date 2 November 2015; AUD Net of fees. Past performance is not indicative of future performance.
Higher return on capital and better value than benchmark indices FTSE EOAS Nanuk New World Fund Bloomberg World Index (benchmark) 71 515 5,118 Number of Stocks 36.5 35.3 122.4 Weighted Average Market Cap (US$bn) 12.4 2.9 4.2 Median Market Cap (US$bn) 15.4 18.0 15.3 PE Ratio (FY1) 21.2% 16.0% 16.9% ROE 29.4% 32.0% 32.1% LT Debt to Capital 11.8% 11.1% 12.6% Forecast 3-5yr EPS growth 1.8% 2.0% 2.3% Dividend Yield 52.9% Turnover (trailing 12 mths) 10.9% 11.1% 9.9% Predicted Volatility (USD returns) vs EOAS vs Bloomberg World 4.3% 4.6% Predicted Tracking Error 94% / 98% 90% / 100% Downside / Upside Capture (since inception) 10 10 10 Sources: Bloomberg, FactSet & Nanuk, as at 31 July 2018
Name Nanuk New World Fund Type Global equity Legal l Structure cture Registered Australian unit trust Trust stee ee EQT Responsible Entity Services Limited Inves estm tment ent Manager er Nanuk Asset Management Pty Limited Cust stod odia ian/ n/Admini inistra rator tor RBC Investor Services Trust Descri cripti tion on The fund holds a diversified portfolio of global equities in companies potentially benefiting from the broad themes of resource scarcity and environmental sustainability Inves estm tment ent Objecti ective To outperform global equities over the longer term Perfor ormanc nce e Benc nchm hmark rk FTSE Environmental Opportunities All Share Total Return Index (AUD) Sugges este ted Time e Period od Suggested minimum investment timeframe of 5 years Fund Currency ency Australian Dollars Curre renc ncy Hedging ing Direct foreign currency exposure typically remains unhedged. The Fund can use foreign exchange contracts to facilitate settlement of stock purchases and to mitigate currency risk on specific investments within the portfolio Inves estm tments ents Listed equities* 80-100% (typically > 95%); Cash 0-20% *may include derivatives such as total return swaps to gain exposure to the underlying equity Number r of Stocks cks 50 – 100 (typically 60-70) Distri tribution utions Taxable income distributed annually, reinvestment election available Fees s & Expense enses s Management fee 80bps, Administration fee 40 bps. Total fees capped at 120bps. Applicat cations ions & Redempti tions ons Daily Minim imum um Inves estment ent Direct investment - $50,000 (Wholesale Investors only) ; Platform investment – platform minimum 11 Platform orm Access ss BT (Wrap, Panorama, Asgard), Hub24, IOOF Pursuit, Macquarie Wrap, Netwealth, OneVue, Powerwrap
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