franklin citywire nma conference presentation v3

For Professional Investor Use Only. Not for Distribution to Retail Investors.

UK Equity – Value Beyond the Blue Chips

Paul Spencer Manager, Franklin UK Mid Cap Fund


FRANKLIN TEMPLETON INVESTMENTS

• High quality business

• Offering stability in good times and bad

• Delivering reliable growth

What is Blue Chip?

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FRANKLIN TEMPLETON INVESTMENTS 2

What is the connection?


Franklin Templeton Has Got News For You

Roman Abramovich Gulf of Mexico Oil Spill

Joseph Kabila Fred Goodwin



They are linked to ‘blue chip’ investments


Roman Abramovich

EVRAZ

Gulf of Mexico Oil Spill

BP

Fred Goodwin

Royal Bank of Scotland

Joseph Kabila

ENRC



• 12% of the FTSE All Share Index

• 203 companies excluding investment trusts

• Market capitalisation of £195bn, debt of £32bn & ebita of £26bn

• Operating profits 47% UK and 53% overseas

What is the FTSE 250?

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FTSE 100 and FTSE 250 Compared

Source: Franklin Templeton Investments as at 30/11/11.

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Sub Sector FTSE 100 (%)

FTSE 250 (%)

Oil & Gas Producers 20.5 3.3 Mining 12.0 4.0 Banks 11.0 0 Pharmaceuticals 8.6 1.5 Telecommunications 6.3 0 Total 58.4% 8.8% Support Services 2.4 12.0 Travel & Leisure 1.7 9.4 Financial Services 0.9 9.0 Media 2.6 5.0 Software and Computer Services 0.3 4.8 Total 7.9% 40.2%

Presenter

Presentation Notes

Mid-cap’s provide important diversity as they are not tied to the fortunes of banks, energy or commodities



Mid-Cap Out-Performance Over the Last Decade

Source: Morningstar Direct®. © 2011 Morningstar UK. All rights reserved as at 30/11/11, total return in GBP over 10 years. For Professional Investor Use Only. Not for Distribution to Retail Investors.

0

50

100

150

200

250

300

30/11/2001 30/11/2002 30/11/2003 30/11/2004 30/11/2005 30/11/2006 30/11/2007 30/11/2008 30/11/2009 30/11/2010 30/11/2011

FTSE 250 ex IT FTSE 100

Per

form

ance

in G

BP

(reb

ased

to 1

00)

Presenter

Presentation Notes

UK Mid Caps have dominated UK Equity markets but surprisingly make up a relatively small part of the average UK investors’ portfolio. Today we are going to talk a bit more about why we believe people need to put Mid Cap on their radar – Next slide



Which of These Mid-Caps Have Blue Chip Credentials?

Stock Industry

Babcock Outsourcing Croda Personal care Dignity Funeral services Genus Animal breeding biotechnology Greggs Bakery retailer Hiscox Insurance Rotork Actuators and valves Spirax Sarco Steam management systems Telecity Data centres Ultra Electronics Defence equipment

Presenter

Presentation Notes

Which stocks do you recognise? Which stocks would you buy?



Why Mid-Caps are The New Blue Chips

• High quality businesses

• Stable performance

• Reliable growth

• Strong balance sheets

• Highly regarded management

Leading to strong long-term performance from a carefully selected portfolio of UK mid-caps


Appendix



Franklin UK Mid Cap Fund Fund Details Fund Details

Management Paul Spencer

Asset Category UK Equity Investment Style Flexible IMA sector UK All Companies Benchmark FTSE 250 Ex Investment Trusts Index Launch Date 17/10/2011 Number of Positions 38 Portfolio Size £498 million

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The Franklin UK Mid Cap Fund launched on 17 October 2011 to receive the assets of the Rensburg UK Mid Cap Growth Trust, a unit trust. Source: Franklin Templeton Investments, as at 30/11/11. Morningstar Rating™ as at 30/11/11, in the UK Mid-Cap Equity Morningstar Category™.

Lipper Leader Lipper Leader Lipper Leader



Fund Performance

Source: Franklin Templeton Investments and Morningstar as at 30/11/11. © 2011 Morningstar, Inc. All rights reserved. Performance details provided are in GBP, include the reinvested dividends net of basic rate UK tax and are net of management fees. The Franklin UK Mid Cap Fund launched on 17/10/11 to receive the assets of Rensburg UK Mid Cap Growth Trust, a unit trust. Fund performance data is based on the mid price of the Rensburg UK Mid Cap Growth Trust from its launch on 12/07/1999 to 30/09/2011 and the net asset value of the Franklin UK Mid Cap Fund A(inc) shares thereafter. Past performance is no guarantee of future performance.

As at 30 November 2011

1 Year 3 Years 5 Years 10 Years Franklin UK Mid Cap Fund 4.2% 94.5% 41.0% 197.3% FTSE 250 Ex Investment Trusts Index 0.3% 88.8% 11.9% 141.7% IMA UK All Companies Sector -1.9% 47.4% 0.4% 47.1% Quartile 1 1 1 1



Fund Manager Biography

Mr Spencer is Lead Manager of the Franklin UK Mid Cap Fund and Joint Manager of the Franklin UK Managers’ Focus Fund. A member of the Franklin UK Equity Team, he specialises in UK mid-cap equity analysis and investment.

Paul joined Franklin Templeton Investments when it acquired Rensburg Fund Management in January 2011.

Paul started his investment career in 1987, when he joined BWD Rensburg. Within the next eight years, Paul progressed through the ranks becoming Head of Research. In 1991, he assumed responsibility for the BWD UK Smaller Companies Trust leaving in 1995 to join Granville Davies Limited as a Director and Small and Mid Cap analyst. In 1999, Paul joined TD Waterhouse where he was Head of Research, specialising in small and mid- cap investment analysis. He returned to Rensburg in 2006 to manage the Rensburg UK Mid Cap Growth Trust, now called the Franklin UK Mid Cap Fund.

During his tenure as Fund Manager of this Fund, he has received a number of awards for investment excellence including the Moneywise Best UK All Companies Fund in 2008, 2009, 2010, an award from Money Observer for the Best UK Small/Mid Cap Fund 2009 and Best UK All Companies Fund over three years from Lipper in 2009.

Paul holds a BA (Hons) Economics from Nottingham University. He is a Fellow of the Securities Institute (FSI).

Paul Spencer Vice President, Fund Manager Franklin Templeton Fund Management Limited Location: Leeds, UK

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Important Information For professional investor use only, this document is not aimed at, nor intended for use by retail investors.

Copyright © 2012 Franklin Templeton Investments. All rights reserved.

This document is intended to be of general interest only and does not constitute legal or tax advice nor is it an offer for shares or invitation to apply for shares in the Franklin UK Mid Cap Fund. Nothing in this document should be construed as investment advice. Opinions expressed are the author's at publication date and they are subject to change without prior notice.

Performance details provided are in GBP, include the reinvested dividends net of basic rate UK tax and are net of management fees. The Franklin UK Mid Cap Fund launched on 17/10/11 to receive the assets of Rensburg UK Mid Cap Growth Trust, a unit trust. Fund performance data is based on the mid price of the Rensburg UK Mid Cap Growth Trust from its launch on 12/07/1999 to 30/09/2011 and the net asset value of the Franklin UK Mid Cap Fund A(inc) shares thereafter. Sales charges and other commissions, other taxes and relevant costs to be paid by an investor are not included in the calculations. Past performance is no guarantee of future performance.

© 2011 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; an (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

The price of the shares in the fund and the income received from it can go down as well as up, and investors may not get back the full amount invested. Currency fluctuation may affect the value of overseas investment. Investment in these funds entails risks which are described in their Prospectus and Simplified Prospectus.

Subscriptions to shares in the funds can only be made on the basis of the current full or simplified prospectus of the funds, accompanied by the latest available audited annual report and the latest semi-annual report if published thereafter, which can be requested from the address below.

An investment in the funds entail risks which are described in the funds’ full and simplified prospectus.

No shares of the Fund may be directly or indirectly offered or sold to nationals or residents of the United States of America. Shares of the Fund are not available for distribution in all jurisdictions and prospective investors should confirm availability with their local Franklin Templeton Investments representative before making any plans to invest.

References to indices are made for comparative purposes only and are provided to represent the investment environment existing during the time periods shown. An index is unmanaged and one cannot invest directly in an index. The performance of the index does not include the deduction of expenses and does not represent the performance of any Franklin Templeton Group fund.

For a free copy of the latest prospectus, the annual report and semi-annual report, if published thereafter or for more information about any Franklin Templeton Investments’ fund, UK investors should contact: Franklin Templeton Investments, Telephone: 0800 305 306, Email: [email protected] or write to us at the address below.

Issued by Franklin Templeton Investment Management Limited (FTIML). Registered office: The Adelphi, 1-11 John Adam Street, London WC2N 6HT. FTIML is authorised and regulated in the UK by the Financial Services Authority.

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franklin citywire nma conference presentation v3

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